Notice2025-14664
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend its Fees Schedule To Increase the Monthly Fee for 10 Gb Physical Ports
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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 4, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 147 (Monday, August 4, 2025)</title>
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[Federal Register Volume 90, Number 147 (Monday, August 4, 2025)]
[Notices]
[Pages 36503-36506]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14664]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103588; File No. SR-CboeBZX-2025-093]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
its Fees Schedule To Increase the Monthly Fee for 10 Gb Physical Ports
July 30, 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 17, 2025, Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'')
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 BZX Exchange, Inc. (the ``Exchange'' or ``BZX Equities'')
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://markets.cboe.com/us/equities/regulation/rule_filings/BZX/">http://markets.cboe.com/us/equities/regulation/rule_filings/BZX/</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 relating to
physical connectivity fees.\3\
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\3\ The Exchange initially filed the proposed fee changes on
July 3, 2023 (SR-CboeBZX-2023-046). On September 1, 2023, the
Exchange withdrew that filing and submitted SR-CboeBZX-2023-067. On
September 29, 2023, the Securities and Exchange Commission issued a
Suspension of and Order Instituting Proceedings to Determine whether
to Approve or Disapprove a Proposed Rule Change to Amend its Fees
Schedule Related to Physical Port Fees (the ``OIP'') in anticipation
of a possible U.S. government shutdown. On October 2, 2023, the
Exchange filed the proposed fee change (SR-CboeBZX-2023-080). On
October 13, 2023, the Exchange withdrew that filing and on business
date October 16, 2023 submitted SR-CboeBZX-2023-084. On December 12,
2023, the Exchange withdrew that filing and submitted SR-CboeBZX-
2023-103. On February 9, 2024, the Exchange withdrew that filing and
submitted SR-CboeBZX-2024-016. On April 9, 2024, the Exchange
withdrew that filing and submitted SR-CboeBZX2024-027. On June 7,
2024, the Exchange withdrew that filing and submitted SR-CboeBZX-
2024-051. On August 29, 2024, the Exchange withdrew that filing and
submitted SR-CboeBZX-2024-079. On October 25, 2024, the Exchange
withdrew that filing and submitted SR-CboeBZX-2024-106. On October
28, 2024, the Exchange withdrew that filing and submitted SR-
CboeBZX-2024-108. On December 18, 2024, the Exchange withdrew that
filing and submitted SR-CboeBZX-2024-127. On February 14, 2025, the
Exchange withdrew that filing and submitted SR-CboeBZX-2025-029. On
March 13, 2025, the Exchange withdrew that filing and submitted SR-
CboeBZX-2025-042. On May 9, 2025, the Exchange withdrew that filing
and submitted SR-CboeBZX-2025-066. On July 7, 2025, the Exchange
withdrew that filing and submitted SR-CboeBZX-2025-087. On July 17,
2025 the Exchange withdrew that filing and submitted this filing.
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By way of background, a physical port is utilized by a Member or
non-Member to connect to the Exchange at the data centers where the
Exchange's servers are located. The Exchange currently assesses the
following physical connectivity fees for Members and non-Members on a
monthly basis: $2,500 per physical port for a 1 gigabit (``Gb'')
circuit and $7,500 per physical port for a 10 Gb circuit. The Exchange
proposes to increase the monthly fee for 10 Gb physical ports from
$7,500 to $8,500 per port. The Exchange notes the proposed fee change
better enables it to continue to maintain and improve its market
technology and services and also notes that the proposed fee amount,
even as amended, continues to be in line with, or even lower than,
amounts assessed by other exchanges for similar connections.\4\ The
Exchange also notes
[[Page 36504]]
that a single 10 Gb physical port can be used to access the Systems of
the following Affiliate Exchanges: the Cboe BYX Exchange, Inc.
(equities), Cboe EDGX Exchange, Inc. (options and equities platforms),
Cboe EDGA Exchange, Inc., (equities) and Cboe C2 Exchange, Inc.,
(options) (collectively, ``Affiliate Exchanges'').\5\ Notably, only one
monthly fee currently (and will continue) to apply per 10 Gb physical
port regardless of how many Affiliate Exchanges are accessed through
that one port.\6\
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\4\ See e.g., The Nasdaq Stock Market LLC (``Nasdaq''), General
8, Connectivity to the Exchange. Nasdaq and its affiliated exchanges
charge a monthly fee of $16,500 for each 10Gb Ultra fiber connection
to the respective exchange. See also New York Stock Exchange LLC,
NYSE American LLC, NYSE Arca, Inc., NYSE Chicago Inc., NYSE
National, Inc. Connectivity Fee Schedule, which provides that 10 Gb
LX LCN Circuits (which are analogous to the Exchange's 10 Gb
physical port) are assessed $22,000 per month, per port.
\5\ The Affiliate Exchanges are also submitting contemporaneous
identical rule filings.
\6\ The Exchange notes that conversely, other exchange groups
charge separate port fees for access to separate, but affiliated,
exchanges. See e.g., Securities and Exchange Release No. 99822
(March 21, 2024), 89 FR 21337 (March 27, 2024) (SR-MIAX-2024-016).
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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.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ 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) \9\ 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) \10\ of the Act, which
requires that Exchange rules provide for the equitable allocation of
reasonable dues, fees, and other charges among its Members and other
persons using its facilities. This belief is based on various factors
as described below.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ Id.
\10\ 15 U.S.C. 78f(b)(4).
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The Exchange believes the proposed fees are reasonable as they are
lower than, the amounts assessed by equities exchanges for analogous
market access connections and which were similarly adopted via the rule
filing process and filed with the Commission. The Exchange further
notes that other the exchanges that offer similar pricing for similar
or the same connections have a comparable, or even lower, market share
as the Exchange, as detailed further below. Indeed, the Exchange has
reviewed the U.S. equities market share \11\ for each of the sixteen
equities markets utilizing total shares traded in 2025 through July 2,
2025, as set forth in the following graph:
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\11\ Market share is the percentage of volume on a particular
exchange relative to the total volume across all exchanges and
indicates the amount of order flow directed to that exchange. High
levels of market share enhance the value of trading and ports. The
Exchange's calculation of market share also excludes auction volume
on both NYSE and Nasdaq, as the benefits of NYSE's and Nasdaq's
comparable access connections (e.g., reduced latency) are not
realized for transactions executed in their opening and closing
auctions, which are instead executed at specific, codified times of
the trading day. Accordingly, the Exchange believes that traded
volume in NYSE's and Nasdaq's opening and closing auctions are not
relevant for comparative purposes.
[GRAPHIC] [TIFF OMITTED] TN04AU25.000
More specifically, the Exchange notes that the proposed physical
port fee of $8,500 per month, per physical port, is comparable to fees
charged by at least three other exchanges with similar market share.
Indeed, two of these exchanges--Nasdaq BX (``BX'') and Nasdaq PSX
(``PSX'')--have less market share than BZX quities yet charge higher
[[Page 36505]]
monthly fees for their competing products. These comparisons are
summarized in Table 1:
Table 1
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Market share
Exchange (%) Monthly fee per port
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BZX Equities.................................. 3.60 Proposed $8,500 for each 10 Gb Physical Port
Connection.
Nasdaq BX..................................... 0.27 $11,000 for each 10 Gbps Fiber Connection.
$16,500 for each 10 Gbps Ultra Fiber
Connection.
Nasdaq PSX.................................... 0.13 $11,000 for each 10 Gbps Fiber Connection.
$16,500 for each 10 Gbps Ultra Fiber
Connection.
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The Exchange believes its proposal is reasonable as it reflects a
moderate increase in physical connectivity fees for 10 Gb physical
ports and its offering. As amended, the proposed 10 Gb physical port
fee continues to be less than the fee charged by both BX \12\ and
PSX,\13\ even though BZX Equities maintains greater market share than
BX and PSX, both individually and collectively. Specifically, despite
having nearly 3x more market share (3.60%) than that of BX (0.27%) and
PSX (0.13%), BZX's proposed $8,500 per month for each 10 Gb physical
port connection is still $2,500 less than BX's and PSX's 10 Gbps fiber
connection fee ($11,000), and $8,000 less than BX's and PSX's 10 Gbps
Ultra Fiber connection fee ($16,500). Furthermore, by purchasing one
physical port on BZX, a Member gains access to each of BZX Equities'
Affiliate Exchanges (for both equities and options), providing them
connectivity to nearly 11% of the equities market.\14\ While BX and PSX
connectivity provide similar access to Nasdaq Stock Market, LLC's
(``Nasdaq'') other markets, a 10 Gb physical port fee on BZX Equities
is still comparatively lower than that assessed for access to BX, PSX,
and Nasdaq.\15\
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\12\ See Nasdaq BX (``BX'') rulebook, General 8, Connectivity to
the Exchange, available at: <a href="https://listingcenter.nasdaq.com/rulebook/BX/rules/BX%20General%208/Fiber%20Connection%20to%20the%20Exchange/EQUALS/#position">https://listingcenter.nasdaq.com/rulebook/BX/rules/BX%20General%208/Fiber%20Connection%20to%20the%20Exchange/EQUALS/#position</a>.
\13\ See Nasdaq PSX (``PSX'') rulebook, General 8, Connectivity
to the Exchange, available at: <a href="https://listingcenter.nasdaq.com/rulebook/phlx/rules/Phlx%20General%208">https://listingcenter.nasdaq.com/rulebook/phlx/rules/Phlx%20General%208</a>.
\14\ 0.77% (BYX) + 3.60% (BZX) + 5.42% (EDGX) + 0.66% (EDGA) =
10.45%.
\15\ For $8,500 per month, BYX Members gain access to
approximately 11% of the market. For $16,500 a month, Nasdaq members
gain access to approximately 14.21% of the market: 13.21% (Nasdaq) +
.27% (BX) + .13% (PSX) = 14.21%.
Table 2
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Market share
Exchange (%) Monthly fee per port
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BZX Equities.................................. 3.60 Proposed $8,500 for each 10 Gb Physical Port
Connection.
MIAX.......................................... 1.09 $8,000 for each 10 Gigabit ULL Connection.
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The Exchange also acknowledges the equivalent offering from MIAX
Pearl (``MIAX'') which is $8,000 per port per month for its 10 Gigabit
ULL connection.\16\ While the Exchange's proposed 10 Gb physical port
fee of $8,500 is $500 more than that of MIAX and MIAX maintains greater
market share than BZX, the Exchange again reiterates that unlike MIAX,
a single physical 10 Gb physical port connection offers Exchange
Members access to each of BZX Equities' Affiliated Exchanges (for both
equities and options) and the monthly price does not change based on
the number of exchanges a Member is connected to. In this case,
examining only the Exchange's equities Affiliate Exchanges, as
demonstrated in the chart above, a participant could purchase a single
physical port from the Exchange and access nearly 11% of the U.S.
equities market, in contrast to purchasing a single port from MIAX
Pearl and accessing only around 1% of the U.S. equities market.
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\16\ See MIAX Pearl Equities Fee Schedule.
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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. The proposed fee change will
not impact intramarket competition because it will apply to all
similarly situated Members equally (i.e., all market participants that
choose to purchase the 10 Gb physical port). Additionally, the Exchange
does not believe its proposed pricing will impose a barrier to entry to
smaller participants and notes that its proposed connectivity pricing
is associated with relative usage of the various market participants.
For example, market participants with modest capacity needs can
continue to buy the less expensive 1 Gb physical port (which cost is
not changing) or may choose to obtain access via a third-party re-
seller. While pricing may be increased for the larger capacity physical
ports, such options provide far more capacity and are purchased by
those that consume more resources from the network. Accordingly, the
proposed connectivity fees do not favor certain categories of market
participants in a manner that would impose a burden on competition;
rather, the allocation reflects the network resources consumed by the
various size of market participants--lowest bandwidth consuming members
pay the least, and highest bandwidth consuming members pays the most.
The proposed fee change also does not impose a burden on
competition or on other Self-Regulatory Organizations that is not
necessary or appropriate. As described above, in establishing its
proposed fee change the Exchange compared its proposed fee increase to
that of competitor exchanges' analogous offerings. As noted above, the
proposed fee of $8,500 is less than that of both Nasdaq BX and Nasdaq
PSX, despite both Nasdaq markets maintaining lesser market share than
BZX. Moreover, while BZX's proposed $8,500 10 Gb physical port fee is
$500 more than MIAX's
[[Page 36506]]
$8,000 per month 10 gigabit ULL connection fee, the Exchange again
reiterates that the purchase of a single 10 Gb physical port connection
provides BZX Equities Members with access to all of BZX Equities'
Affiliated Exchanges (both equities and options); i.e., a single 10 Gb
physical port connection provides BZX Equities Members with access to
nearly 11% of the U.S. equities market, while a single 10 gigabit ULL
connection on MIAX provides a MIAX user with access to less than 2% of
the U.S. equities market.
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 \17\ and paragraph (f) of Rule 19b-4 \18\
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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\17\ 15 U.S.C. 78s(b)(3)(A).
\18\ 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#93e1e6fff6bef0fcfefef6fde7e0d3e0f6f0bdf4fce5"><span class="__cf_email__" data-cfemail="b3c1c6dfd69ed0dcdeded6ddc7c0f3c0d6d09dd4dcc5">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-093 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-2025-093. 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 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-2025-093 and should be submitted
on or before August 25, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14664 Filed 8-1-25; 8:45 am]
BILLING CODE 8011-01-P
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