Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Its Fee Schedule To Update the Definition of Trading Platform

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<title>Federal Register, Volume 91 Issue 205 (Monday, October 26, 2026)</title>
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[Federal Register Volume 91, Number 205 (Monday, October 26, 2026)]
[Notices]
[Pages 67349-67351]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-21737]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-106713; File No. SR-CboeBZX-2026-087]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Fee Schedule To Update the Definition of Trading Platform

October 21, 2026.
    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 October 19, 2026, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (``SEC'' or 
``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 update the definition of ``Trading 
Platform.'' 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 the definition of ``Trading 
Platform'' set forth in the Definitions section of its Fee Schedule.\3\ 
The existing definition enumerates three categories of execution 
venue--a registered National Securities Exchange, an Alternative 
Trading System, and an Electronic Communications Network. The Exchange 
now seeks to amend this definition to add a functional, use-based 
category--namely, any other system, facility, or platform through which 
orders of persons other than the operator are systematically executed 
by electronic means, whether by matching such orders against one 
another or by the operator or its affiliate acting in a principal 
trading capacity--so that the term also captures other systems that 
perform a functionally equivalent execution function. The amended 
definition identifies, as non-exhaustive examples, a broker crossing 
system not filed as an ATS, a systematic internalization system, and a 
decentralized blockchain-based or tokenized environment.\4\ The current 
and proposed amended definitions are set forth below.
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    \3\ The Exchange initially submitted the proposed rule change on 
September 1, 2026 (SR-CboeBZX-2026-072). On October 19, 2026, the 
Exchange withdrew that filing and submitted this proposal.
    \4\ The Exchange notes that its proposed definition is similar 
to NYSE's Category 3 of Non-Display Use which is intended to apply 
to trading platforms. NYSE states in its policies that ``This 
category applies to use in trading platform(s), such as, but not 
restricted to, alternative trading systems (ATSs), broker crossing 
networks, broker crossing systems not filed as ATSs, dark pools, 
multilateral trading facilities, exchanges and systematic 
internalization systems.'' See 
NYSE_Market_Data_Complete_Policy_Package.pdf.
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    Current Definition: ``A Trading Platform is any execution platform 
operated as or by a registered National Securities Exchange (as defined 
in Section 3(a)(1) of the Exchange Act), an Alternative Trading System 
(as defined in Rule 300(a) of Regulation ATS), or an Electronic 
Communications Network (as defined in Rule 600(b)(23) of Regulation 
NMS).''
    Proposed Amended Definition: ``A Trading Platform is any execution 
platform operated as or by a registered National Securities Exchange 
(as defined in Section 3(a)(1) of the Exchange Act), an Alternative 
Trading System (as defined in Rule 300(a) of Regulation ATS), an 
Electronic Communications Network (as defined in Rule 600(b)(23) of 
Regulation NMS), or any other system, facility, or platform (including 
but not limited to a broker crossing system not filed as an ATS, a 
systematic internalization system, or a decentralized blockchain-based 
or tokenized environment) through which orders of persons other than 
the operator are systematically executed by electronic means, whether 
by matching such orders against one another or by the operator or its 
affiliate acting in a principal trading capacity.''
    The change is intended to capture changes in the evolving landscape 
of market structure and trading technology, including the increasing 
use of functionally equivalent execution systems that operate outside 
the three enumerated categories. For example, under the current 
definition, a platform operated as or by a registered National 
Securities Exchange, an Alternative Trading System, or an Electronic 
Communications Network plainly constitutes a Trading Platform and is 
thus subject to the applicable fees associated with a Trading 
Platform.\5\ However, a functionally equivalent system that performs 
the same execution function--such as a single-dealer platform that 
internalizes and/or facilitates execution of client order flow, or a 
decentralized or tokenized execution venue--is not expressly named in 
the current enumerated categories, despite performing the same 
execution function as the enumerated venues. To facilitate more 
consistent

[[Page 67350]]

and equitable outcomes across functionally equivalent venues, the 
Exchange proposes to add this language so that ``Trading Platform'' 
better covers the intended scope of execution venues.
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    \5\ For example, a Trading Platform is subject to a fee of 
$5,000/month for BZX Depth for Non-Display Usage, while a non-
Trading Platform is subject to a fee of $2,000/month for this. See 
BZX Equities Fee Schedule.
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    The new framework operates as a functional, use-based standard. It 
reaches any system, facility, or platform through which orders of 
persons other than the operator are systematically executed by 
electronic means, regardless of the execution model employed. The 
definition expressly covers both (i) systems that match third-party 
orders against one another and (ii) systems in which the operator or 
its affiliate executes third-party orders in a principal trading 
capacity. Accordingly, a single-dealer platform that internalizes and/
or facilitates execution of client order flow falls within the 
definition on its face. The parenthetical examples--a broker crossing 
system not filed as an ATS, a systematic internalization system, and a 
decentralized blockchain-based or tokenized environment--are 
illustrative only and the amended definition is not intended to limit 
the scope of the broader category. The requirement that orders be 
``systematically executed by electronic means'' distinguishes covered 
systems from manual, negotiated, or voice-brokered bilateral trading.
    The amended definition is intended to capture emerging technologies 
and execution venues that are functionally analogous to venues with 
established regulatory definitions--including tokenized order books or 
decentralized execution protocols, to the extent they perform or 
support an execution function, and other novel platforms. These venues 
operate in a manner similar to defined legacy execution platforms and 
should be treated as such. The examples set out in the definition--
broker crossing systems not filed as ATSs, systematic internalization 
systems, and decentralized blockchain-based or tokenized environments--
as well as the references to single-dealer platforms in this filing, 
are illustrative of this approach, not an exhaustive list, and the 
definition applies to any system through which third-party orders are 
systematically executed by electronic means, regardless of label.
    The intent of this revised definition is not to introduce a new or 
novel concept; it is instead intended to provide further clarity as to 
the scope of ``Trading Platform,'' with new and emerging execution 
technologies in mind. The Exchange notes that this update better aligns 
itself with the ongoing evolution of market structure and industry 
practice.\6\
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    \6\ See supra note 4.
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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 also believes the proposed rule change is consistent with 
Section 6(b)(4) of the Act,\8\ which requires that Exchange rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its Members and other persons using its facilities. 
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.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
    \9\ 15 U.S.C. 78f(b)(5).
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    In particular, the proposed definition change is designed to 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its Members and other persons using its facilities. 
The change is intended to capture changes in the evolving landscape of 
market structure and trading technology, and to ensure that the term 
``Trading Platform'' is applied consistently and comprehensively to 
functionally equivalent execution systems, regardless of the underlying 
technology or business model. As noted above, the amended definition is 
intended to reach any system, facility, or platform through which 
orders of persons other than the operator are systematically executed 
by electronic means, whether by matching or by principal execution by 
the operator or its affiliate--including, for example, a single-dealer 
platform that internalizes order flow, as well as decentralized or 
tokenized execution venues. A definition that excluded single-dealer 
platforms on the basis of their bilateral structure would draw an 
arbitrary line between venues that use market data in the same way. 
Applying the definition on a consistent, function-based basis to all 
functionally analogous venues, legacy and emerging alike, ensures equal 
treatment and avoids selective application. By ensuring that similar 
venues are treated alike, the proposed definition supports the 
equitable allocation of fees and avoids disparate treatment of 
functionally equivalent venues that do not meet an existing definition. 
The intent of this revised definition is not to introduce a new or 
novel concept; it is instead intended to provide further clarity on the 
platforms that should be covered under the definition, with new and 
emerging trading technologies in mind.

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 rule change is 
grounded in the Exchange's efforts to compete more effectively (e.g., 
by updating its definition of Trading Platform to conform with changes 
in the industry).\10\ As a result, the Exchange believes this proposed 
rule change permits fair competition among national securities 
exchanges.
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    \10\ See supra note 4.
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    Further, the Exchange believes that these changes will not cause 
any unnecessary or inappropriate burden on intramarket competition, as 
the revised definition applies uniformly to all market participants 
that meet the definition of Trading Platform, regardless of their 
specific business model or the technology employed by the execution 
venue.
    Further, the proposed change to update the Trading Platform 
definition does not create an unnecessary or inappropriate inter-market 
burden on competition because it merely updates the Exchange's 
definitions to ensure consistency with the evolving technological 
landscape. Indeed, this proposal ensures that the Exchange's Fee 
Schedule accurately reflects the current scope of execution venues. The 
Exchange believes that the proposed rule change will relieve any burden 
on, or otherwise promote, competition.

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 \11\ and paragraph (f) of Rule 19b-4 \12\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule

[[Page 67351]]

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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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#3e4c4b525b135d5153535b504a4d7e4d5b5d10595148"><span class="__cf_email__" data-cfemail="f98b8c959cd49a9694949c978d8ab98a9c9ad79e968f">[email&#160;protected]</span></a>. Please include 
file number SR-CboeBZX-2026-087 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-2026-087. 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-2026-087 and should be submitted 
on or before November 16, 2026.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-21737 Filed 10-23-26; 8:45 am]
BILLING CODE 8011-01-P


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