Notice2025-13800
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule Related To Add Volume Tiers
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
July 23, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 139 (Wednesday, July 23, 2025)</title>
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[Federal Register Volume 90, Number 139 (Wednesday, July 23, 2025)]
[Notices]
[Pages 34700-34705]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13800]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103501; File No. SR-CboeEDGX-2025-056]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule Related To Add Volume Tiers
July 18, 2025.
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 July 10, 2025, Cboe EDGX Exchange, Inc. (``Exchange'' or ``EDGX'')
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 EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') proposes to
amend its Fee Schedule by: (i) removing the shares component of certain
Add Volume Tiers and replacing it with a component that excludes a
Member's subdollar trading activity; (ii) revise the use of the term
``adds an ADV'' of certain Add Volume Tiers to reflect the term
``ADAV''; (iii) introducing a component that excludes a Member's
subdollar trading activity to Add Volume Tier 4; (iv) removing the
shares component of Non-Displayed Add Volume Tier 4 and replacing it
with a component that excludes a Member's subdollar trading activity;
(v) removing the shares component of Retail Volume Tier 3 and replacing
it with a component that excludes a Member's subdollar trading
activity; and (vi) modify the ADV as a percentage of TCV requirement of
Add Volume Tier 8, Non-Displayed Add Volume Tier 4, and Retail Volume
Tier 3. 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/options/regulation/rule_filings/edgx/">http://markets.cboe.com/us/options/regulation/rule_filings/edgx/</a>) and at the Exchange's Office of the Secretary.
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 applicable to its
equities trading platform (``EDGX Equities'') by: (i) removing the
shares component of certain Add Volume Tiers and replacing it with a
component that excludes a Member's subdollar trading activity; (ii)
revise the use of the term ``adds an ADV'' of certain Add Volume Tiers
to reflect the term ``ADAV''; (iii) introducing a component that
excludes a Member's subdollar trading activity to Add Volume Tier 4;
(iv) removing the shares component of Non-Displayed Add Volume Tier 4
and replacing it with a component that excludes a Member's subdollar
trading activity; (v) removing the shares component of Retail Volume
Tier 3 and replacing it with a component that excludes a Member's
subdollar trading activity; and (vi) modify the ADV as a percentage of
TCV requirement of Add Volume Tier 8, Non-Displayed Add Volume Tier 4,
and Retail Volume Tier 3. The Exchange proposes to implement these
changes effective July 1, 2025.\3\
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\3\ The Exchange previously submitted the proposed rule change
on July 1, 2025 (SR-CboeEDGX-2025-051). On July 10, 2025, the
Exchange withdrew that filing and submitted this proposal.
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The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 16 registered equities exchanges, as well as a
number of alternative trading systems and other off-exchange venues
that do not have similar self-regulatory responsibilities under the
Securities Exchange Act of 1934 (the ``Act''), to which market
participants may direct their order flow. Based on publicly available
information,\4\ no single registered equities exchange has more than
13% of the market share. Thus, in such a low-concentrated and highly
competitive market, no single equities exchange possesses significant
pricing power in the execution of order flow. The Exchange in
particular operates a ``Maker-Taker'' model whereby it pays rebates to
members that add liquidity and assesses fees to those that remove
liquidity. The Exchange's Fee Schedule sets forth the standard rebates
and rates applied per share for orders that provide and remove
liquidity, respectively. Currently, for orders in securities priced at
or above $1.00, the Exchange provides a standard rebate of $0.00160 per
share for orders that add liquidity and assesses a fee of $0.0030 per
share for orders that remove liquidity.\5\ For orders in securities
priced below $1.00,
[[Page 34701]]
the Exchange provides a rebate of $0.00003 per share for orders that
add liquidity and assesses a fee of 0.30% of the total dollar value for
orders that remove liquidity.\6\ Additionally, in response to the
competitive environment, the Exchange also offers tiered pricing which
provides Members opportunities to qualify for higher rebates or reduced
fees where certain volume criteria and thresholds are met. Tiered
pricing provides an incremental incentive for Members to strive for
higher tier levels, which provides increasingly higher benefits or
discounts for satisfying increasingly more stringent criteria.
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\4\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (June 23, 2025), available at <a href="https://www.cboe.com/us/equities/market_statistics/">https://www.cboe.com/us/equities/market_statistics/</a>.
\5\ See EDGX Equities Fee Schedule, Standard Rates.
\6\ Id.
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Add/Remove Volume Tiers
Under footnote 1 of the Fee Schedule, the Exchange offers various
Add/Remove Volume Tiers. In particular, the Exchange offers nine Add
Volume Tiers that provide enhanced rebates for orders yielding fee
codes B,\7\ V,\8\ Y,\9\ 3 \10\ and 4 \11\ where a Member reaches
certain add volume-based criteria. The Exchange now proposes to modify
the criteria of Add Volume Tiers 1-3 by removing the shares component
in the second prong of criteria and replacing this criteria with
criteria that excludes a Member's subdollar trading activity. The
Exchange also proposes to add a second prong of criteria to Add Volume
Tier 4 and modify the first prong of criteria in Add Volume Tier 8 by
removing the shares component and replacing this criteria with criteria
that excludes a Member's subdollar trading activity. Additionally, the
Exchange proposes to amend the first prong of criteria in Add Volume
Tier 8 by decreasing the percentage requirement. The Exchange also
proposes to amend the wording of the first prong of criteria in Add
Volume Tiers 1-4 to be consistent with wording in other tiers on the
Exchange's Fee Schedule and with tiers of the Fee Schedule of its
affiliate exchange, Cboe BZX Exchange, Inc.\12\ The current criteria
for Add Volume Tiers 1-4 and Add Volume Tier 8 is as follows:
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\7\ Fee code B is appended to orders that add liquidity to EDGX
in Tape B securities.
\8\ Fee code V is appended to orders that add liquidity to EDGX
in Tape A securities.
\9\ Fee code Y is appended to orders that add liquidity to EDGX
in Tape C securities.
\10\ Fee code 3 is appended to orders that add liquidity to EDGX
in Tape A or Tape C securities during the pre and post market.
\11\ Fee code 4 is appended to orders that add liquidity to EDGX
in Tape B securities during the pre and post market.
\12\ The Exchange notes that the first prong of criteria in
certain Add Volume Tiers states ``adds an ADV.'' The Exchange
proposes to revise this criteria to state ``has an ADAV,'' which is
an equivalent definition.
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<bullet> Add Volume Tier 1 provides a rebate of $0.0020 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where a Member adds an ADV
\13\ (excluding fee codes ZA \14\ and ZO \15\) >=0.15% of the TCV \16\
or Member adds an ADV (excluding fee codes ZA and ZO) >=20,000,000.
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\13\ ``ADV'' means average daily volume calculated as the number
of shares added to, removed from, or routed by, the Exchange, or any
combination or subset thereof, per day. ADV is calculated on a
monthly basis.
\14\ Fee code ZA is appended to Retail Orders that add liquidity
to EDGX.
\15\ Fee code ZO is appended to Retail Orders that add liquidity
to EDGX during the pre and post market.
\16\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges and trade reporting facilities to a
consolidated transaction reporting plan for the month for which the
fees apply.
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<bullet> Add Volume Tier 2 provides a rebate of $0.0025 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where a Member adds an ADV
(excluding fee codes ZA and ZO) >=0.18% of the TCV or Member adds an
ADV (excluding fee codes ZA and ZO) >=30,000,000.
<bullet> Add Volume Tier 3 provides a rebate of $0.0027 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where a Member adds an ADV
(excluding fee codes ZA and ZO) >=0.25% of the TCV or Member adds an
ADV (excluding fee codes ZA and ZO) >=45,000,000.
<bullet> Add Volume Tier 4 provides a rebate of $0.0029 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where a Member adds an ADV
(excluding fee codes ZA and ZO) >=0.65% of the TCV.
<bullet> Add Volume Tier 8 provides a rebate of $0.0034 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where (1) Member has a total
remove ADV >=0.40% of the TCV or Member has a total remove ADV
>=40,000,000; and (2) Member has a Hidden, Primary Peg ADV \17\
>=1,000,000; and (3) Member has a Hidden Midpoint ADV (i.e., yielding
fee codes DM \18\ or MM \19\) >=5,000,000.
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\17\ Hidden, Primary Peg ADV means ADV in non-displayed orders
that include a Primary Peg instruction as defined in EDGX Equities
Rule 11.6(j)(2).
\18\ Fee code DM is appended to orders that add liquidity to
EDGX using MidPoint Discretionary Orders within the discretionary
range.
\19\ Fee code MM is appended to non-displayed orders that add
liquidity to EDGX using the Mid-Point Peg order type.
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The proposed criteria for Add Volume Tiers 1-4 and Add Volume Tier
8 is as follows:
<bullet> Add Volume Tier 1 provides a rebate of $0.0020 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where a Member has an ADAV
(excluding fee codes ZA and ZO) >=0.15% of the TCV or Member has an Ex-
Subdollar ADAV \20\ (excluding fee codes ZA and ZO) as a percentage of
Ex-Subdollar TCV \21\ >=0.15%.
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\20\ The Exchange proposes to introduce the term ``Ex-Subdollar
ADAV'' to the Definitions section of the Fee Schedule. ``Ex-
Subdollar ADAV'' means ADAV that excludes executions in securities
priced below $1.00.
\21\ The Exchange proposes to introduce the term ``Ex-Subdollar
TCV'' to the Definitions section of the Fee Schedule. ``Ex-Subdollar
TCV'' means TCV that excludes executions in securities that have an
average daily price below $1.00.
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<bullet> Add Volume Tier 2 provides a rebate of $0.0025 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where a Member has an ADAV
(excluding fee codes ZA and ZO) >=0.18% of the TCV or Member has an Ex-
Subdollar ADAV (excluding fee codes ZA and ZO) as a percentage of Ex-
Subdollar TCV >=0.18%.
<bullet> Add Volume Tier 3 provides a rebate of $0.0027 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where a Member has an ADAV
(excluding fee codes ZA and ZO) >=0.25% of the TCV or Member has an Ex-
Subdollar ADAV (excluding fee codes ZA and ZO) as a percentage of Ex-
Subdollar TCV >=0.25%.
<bullet> Add Volume Tier 4 provides a rebate of $0.0029 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where a Member has an ADAV
(excluding fee codes ZA and ZO) >=0.65% of the TCV or Member has an Ex-
Subdollar ADAV (excluding fee codes ZA and ZO) as a percentage of Ex-
Subdollar TCV >=0.65%.
<bullet> Add Volume Tier 8 provides a rebate of $0.0034 per share
in securities priced at or above $1.00 to qualifying orders (i.e.,
orders yielding fee codes B, V, Y, 3 or 4) where (1) Member has a total
remove ADV >=0.37% of the TCV or Member has a total remove Ex-Subdollar
[[Page 34702]]
ADV \22\ as a percentage of Ex-Subdollar TCV >=0.37%; and (2) Member
has a Hidden, Primary Peg ADV >=1,000,000; and (3) Member has a Hidden
Midpoint ADV (i.e., yielding fee codes DM or MM) >=5,000,000.
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\22\ The Exchange proposes to introduce the term ``Ex-Subdollar
ADV'' to the Definitions section of the Fee Schedule. ``Ex-Subdollar
ADV'' means ADV that excludes executions in securities priced below
$1.00.
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Also under footnote 1 of the Fee Schedule, the Exchange offers five
Non-Displayed Add Volume Tiers that provide enhanced rebates for orders
yielding fee codes DM, HA,\23\ MM and RP \24\ where a Member reaches
certain add or remove volume-based criteria. The Exchange now proposes
to amend the first prong of criteria of Non-Displayed Add Volume Tier 4
by decreasing the percentage requirement as well as removing the shares
component and introducing criteria that excludes a Member's subdollar
trading activity. The current criteria for Non-Displayed Add Volume
Tier 4 is as follows:
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\23\ Fee code HA is appended to non-displayed orders that add
liquidity to EDGX.
\24\ Fee code RP is appended to non-displayed orders that add
liquidity to EDGX using the Supplemental Peg order type.
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<bullet> Non-Displayed Add Volume Tier 4 provides a rebate of
$0.0025 per share in securities priced at or above $1.00 to qualifying
orders (i.e., orders yielding fee codes DM, HA, MM, or RP) where (1)
Member has a total remove ADV >=0.40% of the TCV or Member has a total
remove ADV >=40,000,000; and (2) Member has a Hidden, Primary Peg ADV
>=1,000,000; and (3) Member has a Hidden Midpoint ADV (i.e., yielding
fee codes DM or MM) >=5,000,000.
The proposed criteria for Non-Displayed Add Volume Tier 4 is as
follows:
<bullet> Non-Displayed Add Volume Tier 4 provides a rebate of
$0.0025 per share in securities priced at or above $1.00 to qualifying
orders (i.e., orders yielding fee codes DM, HA, MM, or RP) where (1)
Member has a total remove ADV >=0.37% of the TCV or Member has a total
remove Ex-Subdollar ADV as a percentage of Ex-Subdollar TCV >=0.37%;
and (2) Member has a Hidden, Primary Peg ADV >=1,000,000; and (3)
Member has a Hidden Midpoint ADV (i.e., yielding fee codes DM or MM)
>=5,000,000.
Retail Volume Tiers
Under footnote 2 of the Exchange's Fee Schedule, the Exchange
offers various Retail Volume Tiers. In particular, the Exchange offers
three Retail Volume Tiers that provide an enhanced rebate for orders
yielding fee codes ZA and ZO when a Member reaches certain add or
remove volume-based criteria. The Exchange now proposes to amend the
first prong of criteria of Retail Volume Tier 3 by decreasing the
percentage requirement and removing the shares component and
introducing criteria that excludes a Member's subdollar trading
activity. The current criteria for Retail Volume Tier 3 is as follows:
<bullet> Retail Volume Tier 3 provides a rebate of $0.0037 per
share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes ZA or ZO) where (1) Member has a total
remove ADV >=0.40% of the TCV or Member has a total remove ADV
>=40,000,000; and (2) Member has a Hidden, Primary Peg ADV >=1,000,000;
and (3) Member has a Hidden Midpoint ADV (i.e., yielding fee codes DM
or MM) >=5,000,000.
The proposed criteria for Retail Volume Tier 3 is as follows:
<bullet> Retail Volume Tier 3 provides a rebate of $0.0037 per
share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes ZA or ZO) where (1) Member has a total
remove ADV >=0.37% of the TCV or Member has a total remove Ex-Subdollar
ADV as a percentage of Ex-Subdollar TCV >=0.37%; and (2) Member has a
Hidden, Primary Peg ADV >=1,000,000; and (3) Member has a Hidden
Midpoint ADV (i.e., yielding fee codes DM or MM) >=5,000,000.
While ADAV or ADV as a percentage of TCV is generally a reasonable
baseline for determining tiered pricing for Members, the Exchange notes
that in certain months where subdollar trading volume is significantly
higher, TCV becomes inflated due to the higher levels of subdollar
volume. During these months of high subdollar trading volume, if a
Member does not increase its volume to account for the increased TCV,
then the Member is disadvantaged when it comes to satisfying criteria
requiring ADAV or ADV as a percentage of TCV. The Exchange's proposed
introduction of the Ex-Subdollar ADAV and Ex-Subdollar ADV as a
percentage of Ex-Subdollar TCV prong of criteria (the ``Ex-Subdollar
Criteria'') is designed to provide Members with an opportunity to earn
an enhanced rebate during months when subdollar trading activity is
high and the Exchange's calculation of ADAV and ADV inclusive of
subdollar volume under the Tiers' existing criteria could potentially
make it far more difficult for the Member to qualify, particularly when
the Member's volume in securities priced at or above $1.00 remains
relatively constant. The Exchange notes that its proposed Ex-Subdollar
Criteria in Add Volume Tiers 1-4, Add Volume Tier 8, Non-Displayed Add
Volume Tier 4, and Retail Volume Tier 3 will introduce a new method of
calculating ADAV and ADV as a percentage of TCV, exclusive of subdollar
activity.\25\
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\25\ The Exchange notes that NYSE Arca offers a similar method
of calculating total equity volume and total equity CADV for certain
tiers in order to determine the appropriate fees and credits for its
ETP Holders. See NYSE Arca Equities Fee and Charges, NYSE Arca
Marketplace: Trade Related Fees and Credits, Footnote 1. See also
Securities Exchange Act Release No. 34-100506 (July 11, 2024), 89 FR
58215 (July 17, 2024), SR-NYSEArca-2024-58 (``NYSE Arca Fee
Filing'').
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This change is intended to aid Members during months where
subdollar volume is elevated, thus causing the TCV (used as the
denominator when the Exchange calculates this prong of criteria) to be
significantly higher while the Member's ADAV or ADV (used as the
numerator for the Exchange's calculation of this prong of criteria)
remains relatively stable if they are not actively trading in
securities priced below $1.00. In months when subdollar trading
activity is particularly high, the Exchange believes that it would be
unfair to Members that execute significant volume in securities priced
at or above $1.00 to potentially not be able to qualify for an enhanced
rebate or lose existing incentives due to an increase in TCV due to a
significant increase in the amount of volume in securities priced below
$1.00. The Exchange believes that the proposed criteria continues to be
commensurate with the rebate received for each tier and will encourage
Members to grow their volume on the Exchange. Increased volume on the
Exchange contributes to a deeper and more liquid market, which benefits
all market participants and provides greater execution opportunities on
the Exchange.
The proposed decrease of total remove ADV as a percentage of TCV
requirement in Add Volume Tier 8, Non-Displayed Add Volume Tier 4, and
Retail Volume Tier 3 and introduction of the same requirement in the
corresponding Ex-Subdollar Criteria is intended to reflect recent lower
subdollar trading volumes. The Exchange believes that the proposed
criteria continues to be commensurate with the rebate received for the
applicable tier and will continue to encourage Members to grow their
volume on the Exchange.
The proposed modification to the wording of the first prong of
criteria in Add Volume Tiers 1-4 is non-substantive in nature and
serves only to amend the wording to be consistent
[[Page 34703]]
with the language found in other tiers on the Exchange's Fee Schedule
and with tiers of the Fee Schedule of its affiliate exchange, Cboe BZX
Exchange, Inc. There is no functional difference between ``adds an
ADV'' and ``has an ADAV'' in how the Exchange calculates the volume
associated with these terms.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\26\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \27\ 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) \28\ requirement that the rules of
an exchange not be designed to permit unfair discrimination between
customers, issuers, brokers, or dealers as well as Section 6(b)(4) \29\
as it is designed to provide for the equitable allocation of reasonable
dues, fees and other charges among its Members and other persons using
its facilities.
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\26\ 15 U.S.C. 78f(b).
\27\ 15 U.S.C. 78f(b)(5).
\28\ Id.
\29\ 15 U.S.C. 78f(b)(4)
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As described above, the Exchange operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. The Exchange believes that
its proposal to: (i) remove the shares component of certain Add Volume
Tiers and replace it with a component that excludes a Member's
subdollar trading activity; (ii) revise the use of the term ``adds an
ADV'' of certain Add Volume Tiers to reflect the term ``ADAV''; (iii)
introduce a component that excludes a Member's subdollar trading
activity to Add Volume Tier 4; (iv) remove the shares component of Non-
Displayed Add Volume Tier 4 and replace it with a component that
excludes a Member's subdollar trading activity; (v) remove the shares
component of Retail Volume Tier 3 and replace it with a component that
excludes a Member's subdollar trading activity; and (vi) modify the ADV
as a percentage of TCV requirement of Add Volume Tier 8, Non-Displayed
Add Volume Tier 4, and Retail Volume Tier 3 reflects a competitive
pricing structure designed to incentivize market participants to direct
their order flow to the Exchange, which the Exchange believes would
enhance market quality to the benefit of all Members. Additionally, the
Exchange notes that relative volume-based incentives and discounts have
been widely adopted by exchanges,\30\ including the Exchange,\31\ and
are reasonable, equitable and non-discriminatory because they are open
to all Members on an equal basis and provide additional benefits or
discounts that are reasonably related to (i) the value to an exchange's
market quality and (ii) associated higher levels of market activity,
such as higher levels of liquidity provision and/or growth patterns.
Competing exchanges offer similar tiered pricing structures, including
schedules or rebates and fees that apply based upon members achieving
certain volume and/or growth thresholds, as well as assess similar fees
or rebates for similar types of orders, to that of the Exchange.\32\
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\30\ See e.g., BZX Equities Fee Schedule, Footnote 1, Add/Remove
Volume Tiers. See also, NYSE Arca Equities Fees and Charges, NYSE
Arca Marketplace: Trade Related Fees and Credits, Footnote 1 and
NYSE Arca Equities Fees and Charges, Tier Rates--Round Lots and Odd
Lots (Per Share Price $1.00 or Above).
\31\ See e.g., EDGX Equities Fee Schedule, Footnote 1, Add/
Remove Volume Tiers.
\32\ Supra footnote 30.
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In particular, the Exchange believes its proposal to (i) remove the
shares component of certain Add Volume Tiers and replace it with a
component that excludes a Member's subdollar trading activity; (ii)
replace the ADV component of certain Add Volume Tiers with an ADAV
component; (iii) introduce a component that excludes a Member's
subdollar trading activity to Add Volume Tier 4; (iv) remove the shares
component of Non-Displayed Add Volume Tier 4 and replace it with a
component that excludes a Member's subdollar trading activity; (v)
remove the shares component of Retail Volume Tier 3 and replace it with
a component that excludes a Member's subdollar trading activity; and
(vi) modify the ADV as a percentage of TCV requirement of Add Volume
Tier 8, Non-Displayed Add Volume Tier 4, and Retail Volume Tier 3 is
reasonable because the revised tiers will be available to all Members
and provide all Members with an opportunity to receive an enhanced
rebate. The Exchange further believes the proposed modification to the
Add Volume Tiers, Non-Displayed Add Volume Tier 4, and Retail Volume
Tier 3 will provide a reasonable means to encourage liquidity adding
displayed and non-displayed orders in Members' order flow to the
Exchange and to incentivize Members to continue to provide liquidity
adding volume to the Exchange by offering them an opportunity to
receive an enhanced rebate on qualifying orders. An overall increase in
activity would deepen the Exchange's liquidity pool, offer additional
cost savings, support the quality of price discovery, promote market
transparency and improve market quality, for all investors.
Additionally, the Exchange believes that the proposed changes to
the Add Volume Tiers, Non-Displayed Add Volume Tier 4, and Retail
Volume Tier 3 are reasonable as they do not represent a significant
departure from the criteria currently offered in the Fee Schedule. The
Exchange also believes that the proposed changes to the Add Volume
Tiers, Non-Displayed Add Volume Tier 4, and Retail Volume Tier 3
represent an equitable allocation of fees and rebates and is not
unfairly discriminatory because all Members continue to be eligible for
the revised tiers and have the opportunity to meet the tiers' criteria
and receive the corresponding enhanced rebates if such criteria is met.
Without having a view of activity on other markets and off-exchange
venues, the Exchange has no way of knowing whether this proposed rule
change would definitely result in any Members qualifying for the
revised Add Volume Tiers. While the Exchange has no way of predicting
with certainty how the proposed changes will impact Member activity,
based on the prior month's volume, the Exchange anticipates that at
least one Member will be able to satisfy proposed Add Volume Tier 1, at
least one Member will be able to satisfy proposed Add Volume Tier 2, at
least two Members will be able to satisfy proposed Add Volume Tier 3,
no Members will be able to satisfy proposed Add Volume Tier 4, at least
two Members will be able to satisfy proposed Add Volume Tier 8, at
least two Members will be able to satisfy proposed Non-Displayed Add
Volume Tier 4, and at least two Members will be able to satisfy
proposed Retail Volume Tier 3. The Exchange also notes that the
proposed changes will not adversely impact any Member's ability to
qualify for enhanced rebates offered under other
[[Page 34704]]
tiers. Should a Member not meet the proposed new criteria, the Member
will merely not receive that corresponding enhanced rebate.
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. Rather, as discussed above,
the Exchange believes that the proposed change would encourage the
submission of additional order flow to a public exchange, thereby
promoting market depth, execution incentives and enhanced execution
opportunities, as well as price discovery and transparency for all
Members. As a result, the Exchange believes that the proposed changes
further the Commission's goal in adopting Regulation NMS of fostering
competition among orders, which promotes ``more efficient pricing of
individual stocks for all types of orders, large and small.''
The Exchange believes the proposed rule changes do not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Particularly, the proposed
modifications to the Add Volume Tiers, Non-Displayed Add Volume Tier 4,
and Retail Volume Tier 3 will apply to all Members equally in that all
Members are eligible for the revised tiers, have a reasonable
opportunity to meet the tiers' proposed criteria and will receive the
enhanced rebate on their qualifying orders if such criteria is met. The
Exchange does not believe the proposed changes burden competition, but
rather, enhance competition as they are intended to increase the
competitiveness of EDGX by amending existing pricing incentives in
order to attract order flow and incentivize participants to increase
their participation on the Exchange, providing for additional execution
opportunities for market participants and improved price transparency.
Greater overall order flow, trading opportunities, and pricing
transparency benefits all market participants on the Exchange by
enhancing market quality and continuing to encourage Members to send
orders, thereby contributing towards a robust and well-balanced market
ecosystem.
Next, the Exchange believes the proposed rule changes do not impose
any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues that they may participate on
and direct their order flow, including other equities exchanges, off-
exchange venues, and alternative trading systems. Additionally, the
Exchange represents a small percentage of the overall market. Based on
publicly available information, no single equities exchange has more
than 13% of the market share.\33\ Therefore, no exchange possesses
significant pricing power in the execution of order flow. Indeed,
participants can readily choose to send their orders to other exchange
and off-exchange venues if they deem fee levels at those other venues
to be more favorable. Moreover, the Commission has repeatedly expressed
its preference for competition over regulatory intervention in
determining prices, products, and services in the securities markets.
Specifically, in Regulation NMS, the Commission highlighted the
importance of market forces in determining prices and SRO revenues and,
also, recognized that current regulation of the market system ``has
been remarkably successful in promoting market competition in its
broader forms that are most important to investors and listed
companies.'' \34\ The fact that this market is competitive has also
long been recognized by the courts. In NetCoalition v. Securities and
Exchange Commission, the D.C. Circuit stated as follows: ``[n]o one
disputes that competition for order flow is `fierce.' . . . As the SEC
explained, `[i]n the U.S. national market system, buyers and sellers of
securities, and the broker-dealers that act as their order-routing
agents, have a wide range of choices of where to route orders for
execution'; [and] `no exchange can afford to take its market share
percentages for granted' because `no exchange possesses a monopoly,
regulatory or otherwise, in the execution of order flow from broker
dealers'. . . .''.\35\ Accordingly, the Exchange does not believe its
proposed fee change imposes any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
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\33\ Supra note 3.
\34\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\35\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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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 \36\ and paragraph (f) of Rule 19b-4 \37\
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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\36\ 15 U.S.C. 78s(b)(3)(A).
\37\ 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="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#7200071e175f111d1f1f171c0601320117115c151d04"><span class="__cf_email__" data-cfemail="2d5f584148004e4240404843595e6d5e484e034a425b">[email protected]</span></a>. Please include
file number SR-CboeEDGX-2025-056 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-CboeEDGX-2025-056. 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 filing also will be available for inspection
and copying at the principal office of the Exchange. Do not include
personal identifiable information in submissions;
[[Page 34705]]
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-CboeEDGX-2025-056 and
should be submitted on or before August 13, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\38\
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\38\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-13800 Filed 7-22-25; 8:45 am]
BILLING CODE 8011-01-P
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