Notice2025-20387
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule
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Published
November 20, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 222 (Thursday, November 20, 2025)</title>
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[Federal Register Volume 90, Number 222 (Thursday, November 20, 2025)]
[Notices]
[Pages 52470-52473]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-20387]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104188; File No. SR-CboeBZX-2025-139]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
Its Fee Schedule
November 17, 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 September 30, 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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[[Page 52471]]
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 by introducing a new Step-Up Tier and
eliminating the ETP and Closed-End Fund LMM Add Liquidity Rebate. 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 proposes to amend its Fee Schedule applicable to its
equities trading platform (``BZX Equities'') by introducing a new Step-
Up Tier and eliminating the ETP and Closed-End Fund LMM Add Liquidity
Rebate. The Exchange proposes to implement these changes effective
October 1, 2025.
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,\3\ no single registered equities exchange has more than
14% 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.\4\ For orders in securities
priced below $1.00, the Exchange does not provide a rebate for orders
that add liquidity and assesses a fee of 0.30% of the total dollar
value for orders that remove liquidity.\5\ 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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\3\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (September 19, 2025), available at <a href="https://www.cboe.com/us/equities/_statistics/">https://www.cboe.com/us/equities/_statistics/</a>.
\4\ See BZX Equities Fee Schedule, Standard Rates.
\5\ Id.
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Step-Up Tiers
Under footnote 2 of the Fee Schedule, the Exchange offers a Step-Up
Tier that provides an enhanced rebate for orders yielding fee codes
B,\6\ V \7\ and Y \8\ where a Member reaches certain add volume-based
criteria, including ``growing'' its volume as compared to a certain
baseline month. The Exchange now proposes to introduce a second Step-Up
Tier. The proposed criteria for Step-Up Tier 1 is as follows:
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\6\ Fee code B is appended to displayed orders that add
liquidity to BZX in Tape B securities.
\7\ Fee code V is appended to displayed orders that add
liquidity to BZX in Tape A securities.
\8\ Fee code Y is appended to displayed orders that add
liquidity to BZX in Tape C securities.
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<bullet> Step-Up Tier 1 provides a rebate of $0.0028 per share in
securities priced at or above $1.00 to qualifying orders (i.e., orders
yielding fee codes B, V, or Y) where a Member has a Step-Up Displayed
Add TCV \9\ from September 2025 >=0.11%; and a Member has an Ex-
Subdollar Displayed ADAV \10\ as a percentage of Ex-Subdollar TCV \11\
>=0.16%.
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\9\ Step-Up Add TCV means ADAV as a percentage of TCV in the
relevant baseline month subtracted from current ADAV as a percentage
of TCV.
\10\ Ex-Subdollar ADAV means ADAV that excludes executions in
securities priced below $1.00.
\11\ Ex-Subdollar TCV means TCV that excludes executions in
securities that have an average daily price below $1.00.
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Additionally, the Exchange notes that the proposed Step-Up Tier 1
will expire no later than March 31, 2024 [sic], which the Exchange will
indicate on the Exchange's Fee Schedule.
The proposed Step-Up Tier 1, like other Add Volume Tiers and Step-
Up Tiers,\12\ is intended to provide an additional opportunity to
incentivize Members to earn an enhanced rebate by increasing their
order flow to the Exchange, which further contributes to a deeper, more
liquid market and provides even more execution opportunities for active
market participants. Incentivizing an increase in liquidity adding
volume through enhanced rebate opportunities encourages liquidity-
adding Members on the Exchange to increase transactions and take
execution opportunities provided by such increased liquidity, together
providing for overall enhanced price discovery and price improvement
opportunities on the Exchange. As such, increased overall order flow
benefits all Members by contributing towards a robust and well-balanced
market ecosystem.
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\12\ See BZX Equities Fee Schedule, Footnote 1, Add/Remove
Volume Tiers. See also BZX Equities Fee Schedule, Footnote 2, Step-
Up Tiers.
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ETP and Closed-End Fund LMM Add Liquidity Rebate
Under footnote 14 of the Fee Schedule, the Exchange details pricing
for its Lead Market Makers (``LMMs'') in BZX-listed securities. In
particular, the Exchange offers an enhanced rebate of $0.0039 that ETP
LMMs \13\ in BZX-listed securities that have a consolidated average
daily volume of at least 1,000,000 shares are eligible to opt-in to
receive in lieu of the otherwise applicable Liquidity Provision Rate
\14\ that would be received when certain performance-based criteria are
satisfied. The Exchange now proposes to remove the ETP and Closed-End
Fund LMM Add Liquidity Rebate as the Exchange
[[Page 52472]]
no longer wishes to, nor is required to, maintain such rebate. More
specifically, the proposed change removes this rebate as the Exchange
would rather redirect future resources and funding into other programs
and tiers intended to incentivize increased order flow.
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\13\ See footnote 14(b)(i). An ETP LMM is an LMM in BZX-listed
ETP and Closed-End Fund securities.
\14\ The applicable Liquidity Provision Rates are detailed in
footnote 14(B) and are payable daily on a per-security basis to ETP
LMMs that satisfy certain performance-based criteria.
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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.\15\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \16\ 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) \17\ 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) \18\
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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\15\ 15 U.S.C. 78f(b).
\16\ 15 U.S.C. 78f(b)(5).
\17\ Id.
\18\ 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 introduce Step-Up Tier 1 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. Specifically, the
Exchange's proposal to introduce Step-Up Tier 1 is not a significant
departure from existing criteria, is reasonably correlated to the
enhanced rebate offered by the Exchange and other competing
exchanges,\19\ and will continue to incentivize Members to submit order
flow to the Exchange. Additionally, the Exchange notes that relative
volume-based incentives and discounts have been widely adopted by
exchanges,\20\ including the Exchange,\21\ 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 equity
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.
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\19\ See NYSE Arca Marketplace Fees, Tier Rates--Round Lots and
Odd Lots (Per Share Price $1.00 or Above), Step-Up Tiers, available
at <a href="https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf">https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf</a>; see also Investors Exchange Fee
Schedule, Transaction Fees, Incremental Fee Tiers, available at
<a href="https://www.iexexchange.io/resources/trading/fee-schedule">https://www.iexexchange.io/resources/trading/fee-schedule</a>.
\20\ See e.g., EDGX Equities Fee Schedule, Footnote 1, Add/
Remove Volume Tiers.
\21\ See e.g., BZX Equities Fee Schedule, Footnote 1, Add/Remove
Volume Tiers.
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In particular, the Exchange believes its proposal to introduce
Step-Up Tier 1 is reasonable because the proposed tier will be
available to all Members and provide all Members with an opportunity to
receive an enhanced rebate. The Exchange further believes its proposal
to introduce Step-Up Tier 1 will provide a reasonable means to
encourage liquidity adding 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.
The Exchange believes that its proposal to introduce Step-Up Tier 1
is reasonable as the proposed criteria does not represent a significant
departure from the criteria currently offered in the Fee Schedule. The
Exchange also believes that the proposal represents an equitable
allocation of fees and rebates and is not unfairly discriminatory
because all Members will be eligible for the proposed Step-Up Tier 1
and have the opportunity to meet the tier's criteria and receive the
corresponding enhanced rebate 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 proposed Step-Up Tier
1. 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 Step-Up Tier 1. The Exchange also notes
that proposed changes will not adversely impact any Member's ability to
qualify for enhanced rebates offered under other tiers. Should a Member
not meet the proposed new criteria, the Member will merely not receive
that corresponding enhanced rebate.
Furthermore, the Exchange believes that its proposal to eliminate
the ETP and Closed-End Fund LMM Add Liquidity Rebate is reasonable
because the Exchange is not required to maintain this rebate nor
provide ETP LMMs an opportunity to receive enhanced rebates. The
Exchange believes its proposal to eliminate this rebate is equitable
and not unfairly discriminatory because it applies to all ETP LMMs
(i.e., the rebate will not be available for any ETP LMM). The proposed
rule change merely results in ETP LMMs not receiving an enhanced
rebate, which, as noted above, the Exchange is not required to offer or
maintain. Further, ETP LMMs remain eligible to receive the applicable
Liquidity Provision Rate should they satisfy certain performance-based
criteria. In addition, the proposed rule change to eliminate the ETP
and Closed-End Fund LMM Add Liquidity Rebate enables the Exchange to
redirect resources and funding into other programs and tiers intended
to incentivize increased order flow.
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
[[Page 52473]]
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 Exchange's
proposal to introduce Step-Up Tier 1 will apply to all Members equally
in that all Members are eligible for the new tier, have a reasonable
opportunity to meet the proposed tier's criteria and will receive the
enhanced rebate on their qualifying orders if such criteria is met. The
Exchange does not believe the proposed change burdens competition, but
rather, enhances competition as it is intended to increase the
competitiveness of BZX by amending existing pricing incentives in order
to attract order flow and incentivize participants to increase their
participation on the Exchange. 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.
The proposed change to eliminate the ETP and Closed-End Fund LMM
Add Liquidity Rebate will not impose any burden on intramarket
competition because the change applies to all ETP LMMs uniformly in
that the rebate will no longer be available to any ETP LMM.
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 14% of the market share.\22\ 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.'' \23\ 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' . . . .''.\24\ 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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\22\ Supra note 3.
\23\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\24\ 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 \25\ and paragraph (f) of Rule 19b-4 \26\
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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\25\ 15 U.S.C. 78s(b)(3)(A).
\26\ 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#7c0e091019511f1311111912080f3c0f191f521b130a"><span class="__cf_email__" data-cfemail="1d6f687178307e7270707873696e5d6e787e337a726b">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-139 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-2025-139. 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-2025-139 and
should be submitted on or before December 11, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-20387 Filed 11-19-25; 8:45 am]
BILLING CODE 8011-01-P
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