[Federal Register Volume 83, Number 246 (Wednesday, December 26, 2018)]
[Notices]
[Pages 66328-66329]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-27816]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-84844; File No. SR-CboeBZX-2018-087]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Fee Schedule
December 18, 2018.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on December 3, 2018, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II
and III below, which Items have been prepared by the Exchange. The
Exchange has designated the proposed rule change as one establishing or
changing a member due, fee, or other charge imposed by the Exchange
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposed rule change effective upon
filing with the Commission. 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is filing with the Securities and Exchange Commission
(``Commission'') a proposed rule change to amend the fee schedule
applicable to Members and non-Members \5\ of the Exchange pursuant to
BZX Rules 15.1(a) and (c). Changes to the fee schedule pursuant to this
proposal are effective upon filing.
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\5\ A Member is defined as ``any registered broker or dealer
that has been admitted to membership in the Exchange.'' See Exchange
Rule 1.5(n).
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The text of the proposed rule change is available on the Exchange's
website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx),
at the Exchange's Office of the Secretary, and at the Commission's
Public Reference Room.
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'') to increase the rebate
under the Non-Displayed Add Volume Tape A Tier 1, effective December 3,
2018.
The Exchange currently provides a standard rebate of $0.00150 per
share for non-displayed orders that add liquidity. The Exchange also
provides an enhanced rebate under Non-Displayed Add Volume Tape A
Volume Tier, Tier 1 under Footnote 1 (``HV Volume Tier'') which is
available for qualifying non-displayed orders that add liquidity (Tape
A), (i.e., orders which yield fee code HV). Particularly, under the HV
Volume Tier, a Member may receive an enhanced rebate of $0.00260 per
share where they add an ADV \6\ greater than or equal to 0.20% of the
TCV \7\ as Non-Displayed orders that yield fee codes HI or HV.\8\ The
Exchange proposes to increase the HV Volume Tier rebate from $0.00260
per share to $0.00275 per share. The Exchange believes the proposed
change will encourage Members to increase non-displayed add liquidity
on the exchange. The Exchange also notes that another Exchange offers
the same rebate amount for similar transactions.\9\
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\6\ ``ADV'' means average daily volume calculated as the number
of shares added or removed, combined, per day. ADAV and ADV are
calculated on a monthly basis.
\7\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges and trade reporting facilities to a
consolidated transaction reporting plan for the month for which the
fees apply.
\8\ Fee code HI is appended to non-displayed orders that receive
price improvement and add liquidity.
\9\ See New York Stock Exchange Price List 2018, which provides
that the equity per share credit for all Midpoint Passive Liquidity
(``MPL'') orders that provide liquidity, other than MPL orders from
Designated Market Makers (``DMMs''), will receive a rebate of
$0.00275 per share if a Member adds an ADV greater than or equal to
0.14% Tape A NYSE consolidated average daily volume (``CADV''),
excluding any liquidity added by a DMM.
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2. Statutory Basis
The Exchange believes that the proposed rule changes are consistent
with the objectives of Section 6 of the Act,\10\ in general, and
furthers the objectives of Section 6(b)(4),\11\ in particular, 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. The Exchange also 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. The proposed
rule changes reflect a competitive pricing structure designed to
incentivize market participants to direct their order flow to the
Exchange.
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\10\ 15 U.S.C. 78f.
\11\ 15 U.S.C. 78f(b)(4).
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The Exchange believes increasing the rebate under the HV Volume
Tier is reasonable because Members are provided an opportunity to
receive an enhanced rebate for Non-Displayed orders that add liquidity
and is a reasonable means to encourage Members to increase their
liquidity on the Exchange. The Exchange also notes that another
Exchange offers a similar rebate.\12\ The Exchange also believes the
proposed fee change is equitable and non-discriminatory because it
applies uniformly to all Members.
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\12\ See New York Stock Exchange Price List 2018, which provides
that the equity per share credit for all MPL orders that provide
liquidity, other than MPL orders from DMMs, will receive a rebate of
$0.00275 per share if a Member adds an ADV greater than or equal to
0.14% Tape A CADV, excluding any liquidity added by a DMM.
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B. Self-Regulatory Organization's Statement on Burden on Competition
[[Page 66329]]
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act. The Exchange does not believe
that the proposed change burdens competition, but instead, enhances
competition as it is intended to increase the competitiveness of BZX by
modifying pricing incentives in order to attract order flow and
incentivize participants to increase their participation on the
Exchange. The Exchange 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 structures to be unreasonable or
excessive. The proposed change is intended to enhance the rebate
offered for certain non-displayed liquidity added to the Exchange,
which is intended to draw additional liquidity to the Exchange. The
Exchange does not believe the proposed amendment would burden
intramarket competition as it would be available to all Members
uniformly.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has not solicited, and does not intend to solicit,
comments on this proposed rule change. The Exchange has not received
any unsolicited written comments from Members or other interested
parties.
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 \13\ and paragraph (f) of Rule 19b-4
thereunder.\14\ 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.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 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 proposal is
consistent with the Act. Comments may be submitted by any of the
following methods:
Electronic Comments
Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File No. SR-CboeBZX-2018-087 on the subject line.
Paper Comments
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 No. SR-CboeBZX-2018-087. 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 (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of such filing will also be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly.
All submissions should refer to File No. SR-CboeBZX-2018-087 and
should be submitted on or before January 16, 2019.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2018-27816 Filed 12-21-18; 8:45 am]
BILLING CODE 8011-01-P