Notice2025-18963
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 30, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 187 (Tuesday, September 30, 2025)</title>
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[Federal Register Volume 90, Number 187 (Tuesday, September 30, 2025)]
[Notices]
[Pages 46991-46999]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-18963]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104072; File No. SR-CboeBZX-2025-128]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule
September 25, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\
[[Page 46992]]
notice is hereby given that on September 15, 2025, Cboe BZX Exchange,
Inc. (``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'') proposes to
amend its Fee Schedule to: amend the transaction fee for Customer
orders in Penny Program securities that remove liquidity; append fee
code PP to all Non-Customer orders (i.e., Firm, Broker Dealer (``BD''),
Joint Back Office (``JBO''), Market Maker (``MM''), Away MM, and
Professional orders) in Penny Program securities that remove liquidity
and delete current fee code PD; amend the Customer Penny Add Volume
Tier program, MM Penny Add Volume Tier program, and MM Non-Penny Add
Volume Tier program; adopt a new Customer Penny Take Volume Tier
program; and eliminate the MM, Away MM, and Professional Penny Take
Volume Tier program, Away MM Penny Add Volume Tier program, Away MM
Non-Penny Add Volume Tier program, Firm, BD, and JBO Non-Penny Add
Volume Tier program, and Firm, BD, and JBO Penny Add Volume Tier
program. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Commission's website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>), the
Exchange's website (<a href="https://www.cboe.com/us/equities/regulation/rule_filings/bzx/">https://www.cboe.com/us/equities/regulation/rule_filings/bzx/</a>), and at the principal office of the Exchange.
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 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 18 options venues to which market participants
may direct their order flow. Based on publicly available information,
no single options exchange has more than 16% of the market share.\3\
Thus, in such a low-concentrated and highly competitive market, no
single options exchange possesses significant pricing power in the
execution of option order flow. The Exchange believes that the ever-
shifting market share among the exchanges from month to month
demonstrates that market participants can shift order flow or
discontinue to[sic] reduce use of certain categories of products in
response to fee changes. Accordingly, competitive forces constrain the
Exchange's transaction fees, and market participants can readily trade
on competing venues if they deem pricing levels at those other venues
to be more favorable. In response to competitive pricing, the Exchange,
like other options exchanges, offers rebates and assesses fees for
certain order types executed on or routed through the Exchange.
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\3\ See Cboe Global Markets U.S. Options Monthly Market Volume
Summary (August 27, 2025), available at <a href="https://markets.cboe.com/us/options/market_statistics/">https://markets.cboe.com/us/options/market_statistics/</a>.
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The Exchange's Fee Schedule sets forth standard rebates and rates
applied per contract. For example, the Exchange provides a rebate of
$0.29 per contract for MM orders that add liquidity in Penny
Securities, yielding fee code PM. 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.
Fee Code Changes
The Exchange proposes to amend the transaction fee for Customer
orders in Penny Program securities that remove liquidity. Currently,
Customer orders in Penny Program securities that remove liquidity are
assessed a standard transaction fee of $0.45 and yield fee code PC. The
Exchange now proposes to increase the fee for Customer orders in Penny
Program securities that remove liquidity to $0.48.\4\
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\4\ The Exchange proposes to amend fee code PC as set forth in
the Fee Codes and Associated Fees table and in the Standard Rates
table.
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Currently, fee code PP assesses a standard transaction fee of $0.50
and is appended to MM/Away MM/Professional \5\ orders in Penny Program
securities that remove liquidity. The Exchange proposes to append fee
code PP to all Non-Customer orders (i.e., Firm, BD, JBO, MM, Away MM,
and Professional orders) in Penny Program securities that remove
liquidity; the fee code will continue to assess a standard transaction
fee of $0.50. Accordingly, the Exchange also proposes to delete fee
code PD, which assesses a transaction fee of $0.48 for Firm/BD/JBO
orders in Penny Program securities that remove liquidity,\6\ as under
the proposed changes fee code PP will be appended to such orders.
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\5\ ``Professional'' applies to any order for the account of a
Professional.
\6\ The Exchange proposes to amend these fee codes as set forth
in the Fee Codes and Associated Fees table and in the Standard Rates
table. Further, the Exchange proposes to remove reference to fee
code ``PD'' in footnote 5 of the Fee Schedule (Orders Submitted with
a Designated Give Up).
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Customer Penny Add Volume Tiers
The Exchange currently offers six Customer Penny Add Volume Tiers
(``Customer Penny Add Tiers'') under footnote 1 of the Fee Schedule
which provide rebates between $0.35 and $0.53 per contract for
qualifying Customer orders which meet certain add liquidity thresholds
and yield fee code PY.\7\ The Exchange proposes to update the Customer
Penny Add Tiers by (1) amending the current rebate for Tiers 2 through
5 and the Customer Cross-Asset Add Tier, and (2) amending required
criteria for Tiers 2 through 5 and the Customer Cross-Asset Add Tier.
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\7\ Fee Code ``PY'' is appended to Customer Penny orders that
add liquidity.
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The Exchange proposes to change the rebates for Tiers 2 through 5
and the Customer Cross-Asset Tier. Specifically, the Exchange proposes
to amend the Tier 2 rebate from $0.48 to $0.47, the Tier 3 rebate from
$0.51 to $0.49, the Tier 4 rebate from $0.52 to $0.50, the Tier 5
rebate from $0.53 to $0.52, and the Customer Cross-Asset Add Tier from
$0.52 to $0.50.\8\ The rebate for Tier 1 remains unchanged.
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\8\ The Exchange proposes to amend these tier rebates as
described in the table in Footnote 1 and amend the amounts of the
rebates in the Standard Rates table.
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[[Page 46993]]
The Exchange also proposes to amend the required criteria for Tiers
2 through 5, as well as the Customer Cross-Asset Add Tier. The required
criteria for Tier 1 remains unchanged. Currently, to qualify for Tier
2, a Member must have an ADV \9\ >=0.40% of average OCV.\10\ The
Exchange proposes to amend Tier 2 required criteria to state that a
Member must have (1) an ADV >=1.00% of average OCV; or (2) an ADAV \11\
in Customer orders >=0.30% of average OCV. Currently, to qualify for
Tier 3, a Member must have (1) an ADAV in Customer orders >=0.50% of
average OCV; and (2) an ADAV in MM orders >=2.75% of average OCV. The
Exchange proposes to amend Tier 3 required criteria to state that a
Member must have (1) an ADAV in Customer orders >=0.20% of average OCV;
and (2) an ADAV in MM orders >=0.25% of average OCV. Currently, to
qualify for Tier 4, a Member must have an ADAV in Customer orders
>=1.30% of average OCV. The Exchange proposes to amend Tier 4 to state
that a Member must have an ADAV in Customer orders >=1.00% of average
OCV. Currently, to qualify for Tier 5, a Member must have (1) an ADAV
in Customer orders >=2.00% of average OCV; and (2) an ADAV in Customer
Non-Penny orders >=0.50% of average OCV. The Exchange proposes to amend
Tier 5 to state that a Member must have an ADAV in Customer orders
>=1.75% of average OCV. Finally, currently, to qualify for the Customer
Cross-Asset Add Tier, a Member must have (1) an ADAV in Customer orders
>=0.50% of average OCV; and (2) on BZX Equities an ADAV >=0.50% of
average TCV.\12\ The Exchange proposes to amend the Customer Cross-
Asset Add Tier to state that a Member must have (1) an ADAV in Customer
orders >=0.50% of average OCV; and (2) on BZX Equities an ADAV >=0.35%
of average TCV, excluding sub-dollar securities.
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\9\ ``ADV'' means average daily volume calculated as the number
of contracts added or removed, combined, per day.
\10\ ``OCC Customer Volume'' or ``OCV'' means the total equity
and ETF options volume that clears in the Customer range at the
Options Clearing Corporation (``OCC'') for the month for which the
fees apply, excluding volume on any day that the Exchange
experiences an Exchange System Disruption and on any day with a
scheduled early market close. Average OCV is the average daily OCV
for the month (i.e., total OCV divided by the number of trading days
in the month); for example, in a month with 20 trading days, if OCV
is 1,040,000,000, the average OCV would be 1,040,000,000/20, or
52,000,000.
\11\ ``ADAV'' means average daily added volume (in shares)
calculated as the number of contracts added.
\12\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges to the consolidated transaction
reporting plan for the month for which the fees apply, excluding
volume on any day that the Exchange experiences an Exchange System
Disruption and on any day with a scheduled early market close.
Average TCV is the average daily TCV for the month (i.e., total TCV
divided by the number of trading days in the month).
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MM Penny Add Volume Tiers
The Exchange currently offers six MM Penny Add Volume Tiers (``MM
Penny Add Tiers'') under footnote 6 of the Fee Schedule, which provide
rebates between $0.31 and $0.43 per contract for qualifying MM orders
which meet certain add liquidity thresholds and yield fee code PM. The
Exchange proposes to update the MM Penny Add Tiers by (1) eliminating
MM Cross-Asset Tier 2, (2) amending required criteria for Tiers 2
through 4 and MM Cross-Asset Add Tier 1, (3) providing a separate
rebate under the program for qualifying SPY orders, (4) amending the
current rebate for Tiers 1 through 4 and MM Cross-Asset Add Tier 1, and
(5) adopting a new Tier 5.
First, the Exchange proposes to eliminate MM Cross-Asset Tier 2
\13\ and amend the required criteria for Tiers 2 through 5, as well as
MM Cross-Asset Add Tier 1.\14\ The required criteria for Tier 1 remain
unchanged. Currently, to qualify for Tier 2, a Member must have an ADAV
in MM orders >=0.35% of average OCV. The Exchange proposes to amend
Tier 2 required criteria to state that a Member must have Member
has[sic] an ADAV in MM orders >=0.20% of average OCV. Currently, to
qualify for Tier 3, a Member must have an ADAV in MM orders >=0.45% of
average OCV. The Exchange proposes to amend Tier 3 required criteria to
state that a Member must have (1) an ADAV in MM orders >=0.15% of
average OCV; and (2) an ADRV \15\ in MM orders >=0.75% of average OCV.
Currently, to qualify for Tier 4, a Member must have an ADAV in MM
orders >=0.65% of average OCV. The Exchange proposes to amend Tier 4 to
state that a Member must have an ADAV in MM orders >=0.35% of average
OCV. Currently, to qualify for Market-Maker Cross-Asset Add Tier 1, a
Member must have (1) an ADAV in MM orders in SPY, QQQ >=0.20% of
average SPY, QQQ OCV; and (2) on BZX Equities have an ADAV >=0.45% of
average TCV or an ADAV >=45,000,000; and (3) be the LMM on BZX Equities
in at least 50 equity symbols. The Exchange proposes to amend MM Cross-
Asset Add Tier 1 to state that a Member must have (1) an ADAV in MM
orders >=0. 35% of average OCV; and (2) on BZX Equities have an ADAV
>=0.40% of average TCV, excluding sub-dollar securities.
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\13\ The Exchange proposes to eliminate this tier as described
in the table in Footnote 6 and eliminate the amount of the rebate in
the Standard Rates table.
\14\ As part of the proposed changes, the Exchange proposes to
rename ``Market Maker Cross-Asset Add Tier 1'' to ``Market Maker
Cross-Asset Add Tier.''
\15\ ``ADRV'' means average daily removed volume calculated as
the number of contracts removed.
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Next, the Exchange proposes to amend the MM Penny Add Tiers to
adopt separate rebates for qualifying MM orders in SPY which meet the
add liquidity thresholds and yield fee code PM. Specifically, for
qualifying MM orders in SPY which meet the applicable add liquidity
thresholds and yield fee code PM, the Exchange proposes to adopt a per
contract rebate of $0.33 for Tier 1, $0.36 for Tier 2, $0.38 for Tier
3, $0.42 for Tier 4 and $0.43 for MM Cross-Asset Add Tier 1.\16\
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\16\ The Exchange also proposes to adopt two separate sections
within the Standard Rates table for fee code PM (SPY) and fee code
PM (excluding SPY), with applicable rebate amounts.
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The Exchange proposes to change the rebates for Tiers 1 through 4
and the MM Cross-Asset Tier 1, for qualifying MM orders (excluding SPY)
which meet the add liquidity thresholds and yield fee code PM.
Specifically, the Exchange proposes to amend the Tier 1 rebate from
$0.31 to $0.32, the Tier 2 rebate from $0.38 to $0.35, the Tier 3
rebate from $0.39 to $0.38, the Tier 4 rebate from $0.43 to $0.41, and
the MM Cross-Asset Add Tier rebate from $0.38 to $0.42.\17\
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\17\ The Exchange also proposes to amend the amounts of the
rebates for fee code PM (excluding SPY) in the Standard Rates table
accordingly.
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Finally, the Exchange proposes to amend the MM Penny Add Tiers to
adopt Tier 5. To qualify for proposed MM Penny Add Tier 5, a Member
must have an ADAV in MM orders >=0.50% of average OCV. The Exchange
proposes to adopt a Tier 5 rebate of $0.42 per contract for qualifying
MM orders excluding SPY and $0.45 per contract for qualifying MM orders
in SPY.
MM Non-Penny Add Volume Tiers
The Exchange currently offers three MM Non-Penny Add Volume Tiers
(``MM Non-Penny Add Tiers'') under footnote 7 of the Fee Schedule which
provide rebates between $0.45 and $0.88 per contract for qualifying MM
orders which meet certain add liquidity thresholds and yield fee code
NM.\18\
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\18\ Fee Code ``NM'' is appended to MM Non-Penny orders that add
liquidity.
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First, the Exchange proposes to update the required criteria for MM
Non-Penny Add Tier 1. Currently, to qualify for Tier 1, a Member must
have an ADAV in MM orders >=0.10% of average OCV. The Exchange proposes
to
[[Page 46994]]
amend Tier 1 required criteria to state that a Member must have an ADAV
in MM orders >=0.20% of average OCV.
The Exchange further proposes to update the MM Non-Penny Add Tiers
by eliminating Tier 3, which provides for a rebate of $0.88 per
contract for qualifying MM orders where a Member (1) has an ADAV in MM
orders >=1.00% of average OCV; and has an ADAV in MM Non-Penny orders
of >=0.10% of average OCV.\19\
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\19\ The Exchange proposes to eliminate these tiers as described
in the table in Footnote 7 and eliminate the amounts of the rebates
in the Standard Rates table.
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Firm, Broker Dealer, and Joint Back Office Penny Add Volume Tiers
The Exchange currently offers two Firm, BD, and JBO Penny Add
Volume Tiers under footnote 2 of the Fee Schedule which provide rebates
between $0.38 and $0.42 per contract for qualifying Customer orders
which meet certain add liquidity thresholds and yield fee code PF.\20\
The Exchange proposes to delete the Firm, BD, and JBO Penny Add Volume
Tiers currently set forth in footnote 2.\21\
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\20\ Fee code ``PF'' is appended to Firm/BD/JBO Penny orders
that add liquidity.
\21\ The Exchange proposes to eliminate these tiers as described
in Footnote 2 and eliminate the rebates in the Standard Rates table.
Further, the Exchange proposes to delete the reference to Footnote 2
appended to fee code PF within the Fee Codes and Associated Fees
table.
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Customer Penny Take Volume Tier
The Exchange proposes to adopt a Customer Penny Take Volume Tier
(``Customer Penny Take Tier''), applicable to qualifying Customer
orders yielding fee code PC,\22\ to footnote 2 of the Fee Schedule.
Under proposed Customer Penny Take Tier, the Exchange proposes to offer
one tier, which provides a reduced fee of $0.46 per contract for
qualifying Customer orders yielding fee code PC where a Member has an
ADV >=1.00% of average OCV.\23\
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\22\ Fee Code ``PC'' is appended to Customer Penny orders that
remove liquidity.
\23\ The Exchange proposes to add the rebates for fee code PC in
the Standard Rates table accordingly. Further, the Exchange proposes
to append a reference to Footnote 2 to fee code PC within the Fee
Codes and Associated Fees table.
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MM, Away MM, and Professional Penny Take Volume Tiers
The Exchange currently offers three MM, Away MM, and Professional
Penny Take Volume Tiers under footnote 3 of the Fee Schedule which
provide reduced fees of between $0.49 and $0.47 per contract for
qualifying MM, Away MM, and Professional orders which meet certain add/
remove liquidity thresholds and yield fee code PP.\24\ The Exchange
proposes to delete the MM, Away MM, and Professional Penny Take Volume
Tiers currently set forth in footnote 3.\25\
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\24\ Fee Code ``PP'' is appended to MM, Away MM and Professional
Penny orders that remove liquidity.
\25\ The Exchange proposes to eliminate these tiers as described
in Footnote 3 and eliminate the amounts of the rebates in the
Standard Rates table. Further, the Exchange proposes to delete the
reference to Footnote 3 appended to fee code PP within the Fee Codes
and Associated Fees table. The Exchange proposes to mark Footnote 3
as ``Reserved.''
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Firm, Broker Dealer, and Joint Back Office Non-Penny Add Volume Tiers
The Exchange currently offers four Firm, BD, and JBO Non-Penny Add
Volume Tiers under footnote 8 of the Fee Schedule which provide rebates
of $0.33 and $0.82 per contract for qualifying Firm, BD, and JBO orders
which meet certain add liquidity thresholds and yield fee code NF.\26\
The Exchange proposes to eliminate these Away MM Penny Add Tiers.\27\
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\26\ Fee Code ``NF'' is appended to Firm/BD/JBO Non-Penny orders
that add liquidity.
\27\ The Exchange proposes to eliminate these tiers as described
in Footnote 8 and eliminate the amounts of the rebates in the
Standard Rates table. Further, the Exchange proposes to delete the
reference to Footnote 8 appended to fee code NF within the Fee Codes
and Associated Fees table. The Exchange proposes to mark Footnote 8
as ``Reserved.''
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Away MM Penny Add Volume Tier
The Exchange currently offers two Away MM Penny Add Volume Tiers
(``Away MM Penny Add Tiers'') under footnote 10 of the Fee Schedule
which provide rebates of $0.38 and $0.45 per contract (for Tiers 1 and
2 respectively) for qualifying Away MM orders which meet certain add
liquidity thresholds and yield fee code PN.\28\ The Exchange proposes
to eliminate these Away MM Penny Add Tiers.\29\
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\28\ Fee Code ``PN'' is appended to Away MM Penny orders that
add liquidity.
\29\ The Exchange proposes to eliminate these tiers as described
in Footnote 10 and eliminate the amounts of the rebates in the
Standard Rates table. Further, the Exchange proposes to delete the
reference to Footnote 10 appended to fee code PN within the Fee
Codes and Associated Fees table. The Exchange proposes to mark
Footnote 10 as ``Reserved.''
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Away MM Non-Penny Add Volume Tier
The Exchange currently offers two Away MM Non-Penny Add Volume
Tiers (``Away MM Non-Penny Add Tiers'') under footnote 11of the Fee
Schedule which provide rebates of $0.40 and $0.52 per contract (for
Tiers 1 and 2 respectively) for qualifying Away MM orders which meet
certain add liquidity thresholds and yield fee code NN.\30\ The
Exchange proposes to eliminate these Away MM Non-Penny Add Tiers.\31\
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\30\ Fee Code ``NN'' is appended to Away MM Non-Penny orders
that add liquidity.
\31\ The Exchange proposes to eliminate these tiers as described
in Footnote 11 and eliminate the amounts of the rebates in the
Standard Rates table. Further, the Exchange proposes to delete the
reference to Footnote 11 appended to fee code NN within the Fee
Codes and Associated Fees table. The Exchange proposes to mark
Footnote 11 as ``Reserved.''
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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.\32\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \33\ 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) \34\ 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,\35\ 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.
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\32\ 15 U.S.C. 78f(b).
\33\ 15 U.S.C. 78f(b)(5).
\34\ Id.
\35\ 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 proposed changes to
Exchange execution fees and rebates are intended to attract order flow
to the Exchange by continuing to offer competitive pricing while also
creating additional incentives to providing aggressively priced
displayed liquidity, which the Exchange
[[Page 46995]]
believes would enhance market quality to the benefit of all market
participants.
Fee Code Changes
The Exchange believes its proposal to increase the standard
transaction fee for Customer orders in Penny Program securities that
remove liquidity from $0.45 to $0.48 per contract is reasonable because
it is a modest increase and is still in line with (and in some
instances lower than) fees assessed for similar transactions at other
exchanges.\36\ The Exchange believes the proposed change to the fee for
Customer orders in Penny Program securities that remove liquidity is
equitable and not unfairly discriminatory as it will apply to all
Customer orders that remove liquidity in Penny classes (i.e., yield fee
code PC). The Exchange also believes that it is equitable and not
unfairly discriminatory to continue to assess lower fees to Customers
as compared to other market participants because Customer order flow
enhances liquidity on the Exchange for the benefit of all market
participants. Specifically, Customer liquidity benefits all market
participants by providing more trading opportunities, which attracts
MMs. An increase in the activity of these market participants in turn
facilitates tighter spreads, which may cause an additional
corresponding increase in order flow from other market participants.
The fees offered to Customers are intended to attract more Customer
trading volume to the Exchange. Moreover, the options industry has a
long history of providing preferential pricing to Customers, and the
Exchange's current Fees Schedule currently does so in many places, as
do the fees structures of many other exchanges.
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\36\ See, e.g., NYSE Arca Options Fees and Charges, Trade-
Related Charges for Standard Options, Transaction Fee for Electronic
Executions--Per Contract, which provides for a standard transaction
rate of $0.49 per contract for Customer electronic executions in
penny issues that take liquidity; see also The Nasdaq Stock Market,
Options 7 Pricing Schedule, Section 2(1), which provides for fees of
$0.49 per contract for Customer orders in Penny Symbols that remove
liquidity.
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The Exchange believes its proposal to append fee code PP to all
Non-Customer orders in Penny Program securities that remove liquidity
and to delete fee code PD is reasonable. As noted above, the standard
transaction fee for fee code PP will continue to be $0.50 per contract.
The Exchange believes it is reasonable to assess $0.50 per contract for
Firm/BD/JBO orders (increased from $0.48 per contract under current fee
code PD) in Penny Program securities that remove liquidity because it
is a modest increase and is still in line with fees assessed for
similar transactions at other exchanges.\37\ The Exchange believes the
proposed change is equitable and not unfairly discriminatory as it will
apply to all Non-Customer orders, including Firm/BD/JBO orders, that
remove liquidity in Penny classes (i.e., yield fee code PP).
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\37\ See, e.g., NYSE Arca Options Fees and Charges, Trade-
Related Charges for Standard Options, Transaction Fee for Electronic
Executions--Per Contract, which provides for a standard transaction
rate of $0.50 per contract for Firm and Broker Dealer electronic
executions in penny issues that take liquidity; see also The Nasdaq
Stock Market, Options 7 Pricing Schedule, Section 2(1), which
provides for fees of $0.50 per contract for Broker-Dealer and Firm
orders in Penny Symbols that remove liquidity.
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Customer Penny Add Volume Tiers
The Exchange believes the proposal to update the Customer Penny Add
Tiers by amending the current rebate for Tiers 2 through 5 and the
Customer Cross-Asset Add Tier, and amending required criteria for Tiers
2 through 5 and the Customer Cross-Asset Add Tier is reasonable.
Specifically, the Exchange believes the proposed reduced rebates
are reasonable because Members are still eligible to receive a rebate
for meeting the corresponding criteria, albeit at a lower amount than
before. The revised rebate structure features reduced rates that are
counterbalanced by lower qualification thresholds. While, as proposed,
the Customer Penny Add Tiers 2 through 5 and the Customer Cross-Asset
Add Tier will provide lower rebates than that currently offered, the
Exchange still believes that the changes are reasonable as the tiers,
even as amended, will continue to incentivize Members to send
additional Customer orders to the Exchange. Rebates that are designed
to incentivize add activity may provide for deeper, more liquid markets
and execution opportunities at improved prices, which ultimately offers
additional cost savings, supports the quality of price discovery,
promotes market transparency and improves market quality for all
investors. Moreover, the Exchange is not required to maintain these
tiers nor provide rebates. The Exchange believes the proposed changes
to the rebates offered under these tiers still remain commensurate with
the corresponding criteria under the respective tiers.
Further, the Exchange believes the proposed changes to the required
criteria for Tiers 2 through 5 and the Customer Cross-Asset Add Tier
are reasonable because they continue to provide opportunities for
Members to receive higher rebates by providing for incrementally
increasing volume-based criteria they can reach for. The proposed
changes, in general, ease the requirement to achieve applicable tier
threshold, which the Exchange believes will continue to serve as a
reasonable means to encourage Members to increase their liquidity on
the Exchange, particularly in connection with additional Customer order
flow to the Exchange, to the benefit of investors.
The Exchange believes the proposed criteria remain commensurate
with the corresponding enhanced rebates. The Exchange believes the
revised criteria will continue to encourage Members to send additional
Customer orders to the Exchange. Rebates that are designed to
incentivize add volume order flow may increase transactions on the
Exchange, which the Exchange believes incentivizes liquidity providers
to submit additional liquidity and execution opportunities. As noted
above, an overall increase in activity deepens the Exchange's liquidity
pool, offers additional cost savings, supports the quality of price
discovery, promotes market transparency and improves market quality for
all investors.
Finally, the Exchange believes the proposed changes to the Customer
Penny Add Tiers are equitable and not unfairly discriminatory because
they apply uniformly to all Members, who will have the opportunity to
meet the tiers' criteria and receive the corresponding enhanced rebate
for each tier 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 these proposed changes would definitely result
in any Members qualifying for the proposed rebates. While the Exchange
has no way of predicting with certainty how the proposed changes will
impact Member activity, based on trading activity from the prior
months, the Exchange anticipates that up to two Members could achieve
Tier 2, up to two Members could achieve Tier 3, up to one Member could
achieve Tier 4, up to 2 Members could achieve Tier 5, and up to one
Member could achieve the Customer Cross-Asset Add Tier. Additionally,
all Members are able to increase their Customer order flow to attempt
to achieve these tiers. Should a Member not meet the proposed new
criteria, the Member will merely not receive that corresponding
enhanced rebate.
The Exchange also believes that it is equitable and not unfairly
discriminatory to apply the proposed changes to Customer order flow, as
compared to other market participant order flow, because Customer order
flow enhances liquidity on the Exchange for
[[Page 46996]]
the benefit of all market participants. Specifically, Customer
liquidity benefits all market participants by providing more trading
opportunities, which attracts MMs. An increase in the activity of these
market participants in turn facilitates tighter spreads, which may
cause an additional corresponding increase in order flow from other
market participants. The rebates offered to Customers are intended to
attract more Customer trading volume to the Exchange.
MM Penny Add Volume Tiers
The Exchange believes its proposal to update the MM Penny Add Tiers
by eliminating MM Cross-Asset Tier 2, providing a separate rebates
under the program for qualifying SPY orders, amending required criteria
for Tiers 2 through 4 and MM Cross-Asset Add Tier 1, amending the
current rebate for Tiers 1 through 4 and MM Cross-Asset Add Tier 1, and
adopting a new Tier 5 is reasonable, equitable, and not unfairly
discriminatory.
The Exchange believes that it is reasonable and equitable to
eliminate MM Cross-Asset Tier 2, because the Exchange is not required
to maintain this tier or provide Members an opportunity to receive
reduced fees or enhanced rebates. Two Members are currently satisfying
the criteria under this tier, and the Exchange now wishes to
consolidate this tiered pricing program and redirect resources and
funding into other programs and tiers intended to incentivize increased
order flow. Further, Members still have other opportunities to obtain
reduced fees via the MM Penny Add Tiers 1 through 5 and the remaining
MM Cross-Asset Tier, as amended.
The Exchange believes that eliminating MM Cross-Asset Tier 2 is
equitable and not unfairly discriminatory because it applies uniformly
to all Members, in that the tier will not be available for any Member.
The Exchange also notes that the proposed change will not adversely
impact any Member's ability to qualify for other rebate tiers. Further,
the MM Penny Add Tiers 1 through 5 and the remaining MM Cross-Asset
Tier, as amended, will continue to apply uniformly to all qualifying
Members, in that all Members that submit the requisite order flow per
each tier program have the opportunity to compete for and achieve the
available tiers.
The Exchange also believes it is reasonable, equitable and not
unfairly discriminatory to adopt SPY-specific rebates for qualifying MM
orders in SPY which meet the add liquidity thresholds and yield fee
code PM. Specifically, the Exchange believes the proposed change is
reasonable, as the Exchange already maintains product-specific pricing
for other products, such as RUT.\38\ Additionally, other exchanges
similarly provide for SPY-specific pricing and rebate programs.\39\ The
Exchange believes the proposed amendment will also encourage market
participants to increase Market-Maker SPY order flow to the Exchange,
which benefits all market participants by providing additional trading
opportunities. This, in turn, attracts increased large-order flow from
liquidity providers which facilitates tighter spreads and potentially
triggers a corresponding increase in order flow originating from other
market participants. Additionally, the Exchange believes that it is
equitable and not unfairly discriminatory to offer the proposed rebates
to MMs as compared to other market participants, because MMs, unlike
other market participants, take on a number of obligations, including
quoting obligations, which other market participants do not have.
Further, these rebates are intended to incentivize MMs to quote and
trade more on the Exchange, thereby providing more trading
opportunities for all market participants.
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\38\ See BZX Options Exchange Fee Schedule, Fees Codes and
Associated Fees.
\39\ See e.g., MIAX Pearl Fee Schedule, Section 1 Transaction
Rebates/Fees, which provides for a fee range of $0.42 to $0.46 per
contract for priority customer SPY orders that remove liquidity,
based on volume criteria; see also Nasdaq ISE Pricing Schedule,
Section 3, Footnote 5, which provides for tiered rebates for market-
maker SPY orders that add liquidity between $0.10-$0.26 per
contract.
---------------------------------------------------------------------------
The Exchange believes its proposal to amend the current rebate for
MM Penny Add Tiers 1 through 4 and MM Cross-Asset Add Tier 1, and amend
required criteria for MM Penny Add Tiers 2 through 4 and MM Cross-Asset
Add Tier 1 is reasonable, equitable, and not unfairly discriminatory.
Specifically, the Exchange believes the proposed reduced rebates for
Tiers 2, 3, and 4 are reasonable because Members are still eligible to
receive a rebate for meeting the corresponding criteria, albeit at a
lower amount than before. While, as proposed, the MM Penny Add Tiers 2,
3, and 4 will provide lower rebates than that currently offered, the
Exchange still believes that the changes are reasonable as the tiers,
even as amended, will continue to incentivize Members to send
additional MM orders to the Exchange. Further, the Exchange notes that,
in regards to Tiers 2 and 4, the reduced rebates are counterbalanced by
lower qualification thresholds. Rebates that incentivize MM activity
may provide for deeper, more liquid markets and execution opportunities
at improved prices, which ultimately offers additional cost savings,
supports the quality of price discovery, promotes market transparency
and improves market quality for all investors. Moreover, the Exchange
is not required to maintain these tiers nor provide rebates. The
Exchange believes the proposed changes to the rebates offered under
these tiers still remain commensurate with the corresponding criteria
under the respective tiers.
The Exchange believes the increased rebate for MM Penny Add Tier 1
and MM Cross-Asset Add Tier 1 is reasonable, as such changes are
designed to encourage Members to increase their liquidity on the
Exchange and, in the case of MM Cross-Asset Add Tier 1, also their
participation on BZX Equities to continue to achieve the rebate offered
under MM Penny Add Tier 1 or MM Cross-Asset Tier 1. As noted above,
increased MM activity facilitates tighter spreads and an increase in
overall liquidity provider activity, both of which signal additional
corresponding increase in order flow from other market participants,
contributing towards a robust, well-balanced market ecosystem. Indeed,
increased overall order flow benefits investors across both the
Exchange's options and equities platforms by continuing to deepen the
Exchange's liquidity pool, potentially providing even greater execution
incentives and opportunities, offering additional flexibility for all
investors to enjoy cost savings, supporting the quality of price
discovery, promoting market transparency and improving investor
protection.
Further, the Exchange believes the proposed changes to the required
criteria for Tiers 2 through 5 and MM Cross-Asset Add Tier 1 are
reasonable because they continue to provide opportunities for Members
to receive higher rebates by providing for incrementally increasing
volume-based criteria they can reach for. The proposed changes, in
general, ease the requirement to achieve applicable tier threshold,
which the Exchange believes will continue to serve as a reasonable
means to encourage Members to increase their liquidity on the Exchange,
particularly in connection with additional MM order flow to the
Exchange, to the benefit of investors. The Exchange also believes the
proposed change to add MM Penny Add Tier 5 is reasonable because it
provides additional opportunities for Members to
[[Page 46997]]
receive a rebate by providing alternative criteria for which they can
reach.
The Exchange believes the proposed criteria remain commensurate
with the corresponding enhanced rebates. The Exchange believes the
revised criteria will continue to encourage Members to send additional
MM orders to the Exchange. Greater add volume order flow may increase
transactions on the Exchange, which the Exchange believes incentivizes
liquidity providers to submit additional liquidity and execution
opportunities. An overall increase in activity deepens the Exchange's
liquidity pool, offers additional cost savings, supports the quality of
price discovery, promotes market transparency and improves market
quality for all investors.
Finally, the Exchange believes the proposed changes to the MM Penny
Add Tiers are equitable and not unfairly discriminatory because they
apply uniformly to all MMs, who will have the opportunity to meet the
tiers' criteria and receive the corresponding enhanced rebate for each
tier if such criteria is met. Further, the Exchange believes that it is
equitable and not unfairly discriminatory to apply the proposed changes
to MMs as compared to other market participants, because MMs, unlike
other market participants, take on a number of obligations, including
quoting obligations, which other market participants do not have.
Further, these rebates are intended to incentivize MMs to quote and
trade more on the Exchange, thereby providing more trading
opportunities for all market participants.
Without having a view of activity on other markets and off-exchange
venues, the Exchange has no way of knowing whether these proposed
changes would definitely result in any Members qualifying for the
proposed rebates. While the Exchange has no way of predicting with
certainty how the proposed changes will impact Member activity, based
on trading activity from the prior months, the Exchange anticipates
that up to two Members could achieve Tier 2, up to two Members could
achieve Tier 3, and up to one Member could achieve Tier 4. While the
Exchange anticipates no Members will immediately achieve Tier 5 and the
MM Cross-Asset Add Tier, the Exchange believes the proposed changes
could incentivize MM to increase their order flow to attempt to achieve
these tiers. Should a Member not meet the proposed new criteria, the
Member will merely not receive that corresponding enhanced rebate.
MM Non-Penny Add Volume Tiers
The Exchange believes its proposal to update the required criteria
for MM Non-Penny Add Volume Tier 1 is reasonable, equitable, and not
unfairly discriminatory. While the proposed criteria increases the
requirement to achieve the Tier 1 rebate slightly, the Exchange still
believes that the changes are reasonable as the tier, even as amended,
will continue to incentivize Members to send additional MM orders to
the Exchange. An overall increase in MM activity may provide for
deeper, more liquid markets and execution opportunities at improved
prices, which ultimately offers additional cost savings, supports the
quality of price discovery, promotes market transparency and improves
market quality for all investors. Moreover, the Exchange is not
required to maintain these tiers nor provide rebates.
The Exchange believes that it is reasonable and equitable to
eliminate MM Non-Penny Add Volume Tier 3, because the Exchange is not
required to maintain these tiers or provide Members an opportunity to
receive reduced fees or enhanced rebates. No Members are currently
satisfying the criteria under this tier, and the Exchange wishes to
consolidate this tiered pricing program and redirect resources and
funding into other programs and tiers intended to incentivize increased
order flow. Further, Members still have other opportunities to obtain
reduced fees via the remaining MM Non-Penny Add Volume Tiers 1 (as
amended) and 2.
The Exchange believes that eliminating MM Non-Penny Add Volume Tier
3 is equitable and not unfairly discriminatory because it applies
uniformly to all MMs, in that, such tiers will not be available for any
MM. The Exchange also notes that the proposed change will not adversely
impact any Member's pricing or their ability to qualify for other
rebate tiers. Further, MM Non-Penny Add Volume Tiers 1 (as amended) and
2 will continue to apply uniformly to all qualifying Members, in that
all Members that submit the requisite order flow per each tier program
have the opportunity to compete for and achieve the available tiers.
The Exchange also believes the proposed changes to MM Non-Penny Add
Volume Tier 1 is equitable and not unfairly discriminatory because it
applies uniformly to all MMs, who will have the opportunity to meet the
tier's criteria and receive the corresponding enhanced rebate for the
tier 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 these proposed changes would definitely result in any
Members qualifying for the proposed rebate. While the Exchange has no
way of predicting with certainty how the proposed changes will impact
Member activity, based on trading activity from the prior months, the
Exchange anticipates that up to three Members could qualify for this
tier.
Customer Penny Take Volume Tier
The Exchange believes its proposal to adopt a Customer Penny Take
Tier is reasonable, equitable, and not unfairly discriminatory. The
Exchange believes the proposed Customer Penny Take Tier program is
reasonable because it provides the opportunity for Members to receive a
lesser fee by providing for increased volume-based criteria they can
reach for, similar to programs at other options exchanges.\40\ The
Exchange believes the Customer Penny Take Tier program will serve as a
reasonable means to encourage Members to increase their remove order
volume on the Exchange, particularly in connection with additional
Customer Order flow to the Exchange in order to benefit from the
reduced transaction fee. The Exchange also notes that any overall
increased liquidity that may result from the proposed tier incentives
benefits all investors by offering additional flexibility for all
investors to enjoy cost savings, supporting the quality of price
discovery, promoting market transparency and improving investor
protection.
---------------------------------------------------------------------------
\40\ See e.g., MIAX Pearl Fee Schedule, Section 1 Transaction
Rebates/Fees, which provides for a fee range of $0.48 to $0.47 per
contract for priority customer orders that remove liquidity, based
on volume criteria.
---------------------------------------------------------------------------
Finally, the Exchange believes the proposed change to adopt a
Customer Penny Take Tier program is equitable and not unfairly
discriminatory because it applies uniformly to all Members, who will
have the opportunity to meet the tier criteria and receive the
corresponding enhanced rebate if such criteria is met. The Exchange
also believes that it is equitable and not unfairly discriminatory to
apply the proposed program to Customer order flow, as compared to other
market participant order flow, because Customer order flow enhances
liquidity on the Exchange for the benefit of all market participants.
Specifically, Customer liquidity benefits all market participants by
providing more trading opportunities, which attracts MMs. An increase
in the activity of these market participants in turn facilitates
tighter spreads, which may cause an additional corresponding increase
in order flow
[[Page 46998]]
from other market participants. The rebates offered to Customers under
the proposed program are intended to attract more Customer trading
volume to the Exchange.
Without having a view of activity on other markets and off-exchange
venues, the Exchange has no way of knowing whether these proposed
changes would definitely result in any Members qualifying for the
proposed rebate. While the Exchange has no way of predicting with
certainty how the proposed changes will impact Member activity, based
on trading activity from the prior months, the Exchange anticipates
that up to four Members could achieve the tier criteria.
Firm, BD, and JBO Penny Add Volume Tiers; MM, Away MM, and Professional
Penny Take Volume Tiers; Firm, BD, and JBO Non-Penny Add Volume Tiers;
Away MM Penny Add Volume Tiers; and the Away MM Non-Penny Add Volume
Tiers
The Exchange believes that it is reasonable and equitable to
eliminate the Firm, BD, and JBO Penny Add Volume Tiers under footnote 2
of the Fee Schedule; the MM, Away MM, and Professional Penny Take
Volume Tiers under footnote 3 of the Fee Schedule; the Firm, BD, and
JBO Non-Penny Add Volume Tiers under footnote 8 of the Fee Schedule;
the Away MM Penny Add Volume Tiers under footnote 10 of the Fee
Schedule; and the Away MM Non-Penny Add Volume Tiers under footnote 11
of the Fee Schedule. The Exchange is not required to maintain these
tiers or provide Members an opportunity to receive reduced fees or
enhanced rebates. No Members are currently satisfying the criteria
under the Firm, BD, and JBO Penny Add Volume Tiers; only one Member
currently satisfies the criteria under the MM, Away MM, and
Professional Penny Take Volume Tiers; three Members are currently
satisfying the criteria under the Firm, BD, and JBO Non-Penny Add
Volume Tiers; no Members are currently satisfying the criteria under
the Away MM Penny Add Volume Tiers; and only one Member currently
satisfies the criteria under the Away MM Non-Penny Add Volume Tiers.
The Exchange wishes to consolidate its pricing program and redirect
resources and funding into other programs and tiers intended to
incentivize increased order flow.
The Exchange believes that eliminating the Firm, BD, and JBO Penny
Add Volume Tiers; the MM, Away MM, and Professional Penny Take Volume
Tiers; the Firm, BD, and JBO Non-Penny Add Volume Tiers; the Away MM
Penny Add Volume Tiers; and the Away MM Non-Penny Add Volume Tiers is
equitable and not unfairly discriminatory because it applies uniformly
to all Members, in that, such tiers will not be available for any
Member. The Exchange also notes that the proposed change will not
adversely impact any Member's ability to qualify for other rebate
tiers.
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 Exchange does not
believe the proposed changes will impose any burden on intramarket
competition. Particularly, the proposed change applies to all
participants, as applicable. Specifically, the proposed change to amend
the transaction fee for Customer orders in Penny Program securities
that remove liquidity will apply to all Members equally, in that the
new rate of $0.48 per contract will automatically apply to all orders
that yield fee code PC. Similarly, the under the proposed change, fee
code PP will be appended to all Non-Customer orders (i.e., Firm, BD,
JBO, MM, Away MM, and Professional orders) in Penny Program securities
that remove liquidity automatically and uniformly. As discussed above,
while different fees are assessed to different market participants in
some circumstances, these different market participants have different
obligations and different circumstances as discussed above. For
example, preferential pricing to Customers is a long-standing options
industry practice which serves to enhance Customer order flow, thereby
attracting MMs to facilitate tighter spreads and trading opportunities
to the benefit of all market participants.
Further, the proposed amendments to the MM Penny Add Volume Tiers
and MM Non-Penny Add Volume Tiers apply uniformly to all MMs, in that
all MMs have the opportunity to meet each of the respective program's
tier's criteria and receive the corresponding enhanced rebate for the
tier if such criteria are met. To the extent appointed MMs receive a
benefit that other market participants do not, these Members in their
role as MMs on the Exchange have different obligations and are held to
different standards. For example, Market-Makers play a crucial role in
providing active and liquid markets in their appointed products,
thereby providing a robust market which benefits all market
participants.
Similarly, the proposed amendments to the Customer Penny Add Volume
Tiers and the new Customer Penny Take Volume Tier program apply
uniformly to all Members, who will have the opportunity to meet each of
the respective program's tier's criteria and receive the corresponding
enhanced rebate for the tier if such criteria is met. As discussed
above, Customer order flow enhances liquidity on the Exchange for the
benefit of all market participants. Specifically, Customer liquidity
benefits all market participants by providing more trading
opportunities, which attracts MMs. An increase in the activity of these
market participants in turn facilitates tighter spreads, which may
cause an additional corresponding increase in order flow from other
market participants. The rebates offered to Customers under the
programs are intended to attract more Customer trading volume to the
Exchange.
For each of the incentive programs, all Members are able to
increase their applicable order flow to attempt to achieve each of the
program's respective tiers. Should a Member not meet the criteria under
a program, the Member will merely not receive that corresponding
enhanced rebate.
Finally, the proposal to eliminate the MM, Away MM, and
Professional Penny Take Volume Tier program, Away MM Penny Add Volume
Tier program, Away MM Non-Penny Add Volume Tier program, Firm, BD, and
JBO Non-Penny Add Volume Tier program, and Firm, BD, and JBO Penny Add
Volume Tier program applies uniformly to all participants as
applicable, in that, such tiers will not be available to any
participants.
The Exchange also does not believe that the proposed rule change
will 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 17 other options exchanges and
off-exchange venues. Additionally, the Exchange represents a small
percentage of the overall market. Based on publicly available
information, no single options exchange has more than 16% of the market
share.\41\ Therefore, no exchange possesses significant pricing power
in the
[[Page 46999]]
execution of option 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.'' \42\ 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'. . . .''.\43\ 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.
---------------------------------------------------------------------------
\41\ See Cboe Global Markets U.S. Options Monthly Market Volume
Summary (August 27, 2025), available at <a href="https://markets.cboe.com/us/options/market_statistics/">https://markets.cboe.com/us/options/market_statistics/</a>.
\42\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\43\ 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)).
---------------------------------------------------------------------------
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 \44\ and paragraph (f) of Rule 19b-4 \45\
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.
---------------------------------------------------------------------------
\44\ 15 U.S.C. 78s(b)(3)(A).
\45\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------
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#2351564f460e404c4e4e464d5750635046400d444c55"><span class="__cf_email__" data-cfemail="96e4e3faf3bbf5f9fbfbf3f8e2e5d6e5f3f5b8f1f9e0">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-128 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-2025-128. 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-2025-128 and should be submitted
on or before October 21, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\46\
---------------------------------------------------------------------------
\46\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-18963 Filed 9-29-25; 8:45 am]
BILLING CODE 8011-01-P
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