[Federal Register Volume 84, Number 95 (Thursday, May 16, 2019)]
[Notices]
[Pages 22176-22178]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-10113]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85824; File No. SR-CboeBYX-2019-008]


Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Fee Schedule Applicable to the BYX Equities Trading Platform (``BYX 
Equities'') as it Relates to Pricing for the Use of the TRIM Routing 
Strategy

May 10, 2019.
    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 May 1, 2019, Cboe BYX Exchange, Inc. (``Exchange'' or ``BYX'') 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 BYX Exchange, Inc. (``BYX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (the ``Commission'') a 
proposed rule change to amend the fee schedule applicable to the BYX 
equities trading platform (``BYX Equities'') as it relates to pricing 
for the use of the TRIM routing strategy. The text of the proposed rule 
change is attached as Exhibit 5[sic].
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/byx/), 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 purpose of the proposed rule change is to amend the BYX 
Equities fee schedule to change the pricing applicable to orders routed 
using the TRIM routing strategy in connection with planned changes to 
the System routing table.\3\ TRIM is a routing strategy offered by the 
Exchange that is used to target certain low cost exchanges by routing 
to those venues after accessing available liquidity on the BYX Book. In 
February 2019, New York Stock Exchange (``NYSE'') was removed from the 
System routing table as a low cost protected market center, and NYSE 
National, Inc. (``NYSE National'') was added as a low cost protected 
market center. Therefore, pursuant to Rule 11.13(b)(3), the Exchange 
has determined to modify the System routing table such that TRIM no 
longer includes NYSE, and has decided to add NYSE National as a low 
cost venue under the TRIM routing strategy. In addition to this, the 
Exchange has determined that Cboe BZX Exchange, Inc. (``BZX'') is 
generally not a low cost venue and, therefore, should also be removed 
from the list of venues under the TRIM routing strategy. These changes 
to the TRIM routing strategy are scheduled to be introduced on May 1, 
2019.
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    \3\ The term ``System routing table'' refers to the proprietary 
process for determining the specific trading venues to which the 
System routes orders and the order in which it routes them. See Rule 
11.13(b)(3).The Exchange reserves the right to maintain a different 
System routing table for different routing options and to modify the 
System routing table at any time without notice.
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    Currently, orders routed to NYSE using the TRIM routing strategy 
are assessed a fee of $0.00280 per share.\4\ Orders routed to BZX using 
the TRIM routing strategy are assessed a fee of $0.00300 per share.\5\ 
Also, orders currently routed to NYSE National using the SLIM routing 
strategy are provided a rebate of $0.00200 and yield fee code NX. The 
Exchange proposes changes to these fees in connection with the changes 
to the routing table for TRIM.
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    \4\ See Cboe BYX U.S. Equities Exchange Fee Schedule, fee code 
D.
    \5\ See Cboe BYX U.S. Equities Exchange Fee Schedule, fee code 
SZ.
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    In recognition of the fact that NYSE National can be accessed at a 
low cost today, the Exchange proposes to provide a rebate to orders 
routed to this

[[Page 22177]]

exchange using the TRIM routing strategy. Specifically, the Exchange 
proposes to add TRIM to the list of routing strategies that yield fee 
code NX, which relates to orders routed to NYSE National. As proposed, 
orders routed using the TRIM routing strategy would be provided a 
rebate of $0.00200 per share in securities priced at or above $1.00, 
and no charge or rebate would be applied for securities priced below 
$1.00. The rebates are consistent with rebates currently offered for 
orders routed to NYSE National using a similar low cost routing 
strategy, SLIM, which yields fee code NX.
    In addition to this, since NYSE is no longer included as a low cost 
protected market center and because BZX is being removed from the TRIM 
routing strategy as it is generally not a low cost venue, the Exchange 
proposes to eliminate special pricing for orders routed to NYSE using 
the TRIM routing strategy under fee code D and for orders routed to BZX 
using the TRIM strategy under fee code SZ. Such orders would now pay 
the default routing fee for orders routed using this routing 
strategy.\6\
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    \6\ See Cboe BYX U.S. Equities Exchange Fee Schedule, fee codes 
BJ, C and proposed NX.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act,\7\ in general, and furthers the requirements 
of Section 6(b)(4),\8\ 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 
believes the proposed routing fee changes are appropriate as they 
reflect changes to the System routing table used to determine the order 
in which venues are accessed using the TRIM routing strategy. TRIM 
specifically targets certain equities exchanges that provide low cost 
executions or rebates to liquidity removing orders, and routes to those 
venues after trading with the BYX Book. The Exchange believes that the 
proposed changes reflect the intent of Members when they submit 
routable order flow to the Exchange using the TRIM routing strategy.
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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that it is reasonable and equitable to assess 
the proposed rebate on orders routed to NYSE National using the TRIM 
routing strategy. As mentioned previously, the Exchange recently added 
this exchange to its list of low cost protected market centers, and 
wishes to provide the benefit of the rebate or lower fee provided by 
this market to BYX Members using the TRIM routing strategy. The 
Exchange currently offers such incentives when routing to those markets 
using another low cost routing strategy, SLIM. As is the case for 
orders routed via the SLIM routing strategy to NYSE National, the 
Exchange believes the proposed rebate applicable to the TRIM routing 
strategy to this venues generally reflect the current transaction 
rebates available for accessing liquidity on NYSE National.\9\ The 
Exchange believes that this change may increase interest in the 
Exchange's TRIM routing strategy, in particular, by passing on better 
pricing to BYX members that choose to enter such orders on the 
Exchange, thereby encouraging additional order flow to be entered to 
the BYX Book. In addition to this, the Exchange believes that is 
reasonable and equitable to eliminate special pricing for orders routed 
to NYSE and BZX using TRIM under fee code D and SZ, respectively, as 
NYSE and BZX will no longer be included as a low cost venues under the 
TRIM routing strategy.
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    \9\ NYSE National currently provides a rebate of $0.00200 per 
share in securities priced at or above $1.00 for members that 
achieve their taking tier. See NYSE National Schedule of Fees and 
Rebates, I. Transaction Fees, B. Tiered Rates. Orders that remove 
liquidity in securities below $1.00 are executed without charge or 
rebate. See NYSE National, Schedule of Fees and Rebates, I. 
Transaction Fees, A. General Rates.
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    Finally, the Exchange believes that the proposed changes are 
equitable and not unfairly discriminatory as the proposed rebate would 
apply equally to all Members that use the Exchange to route orders 
using the associated routing strategy. The proposed fees are designed 
to reflect the fees charged and rebates offered by certain away trading 
centers that are accessed by Exchange routing strategies, and are being 
made in conjunction with changes to the System routing table designed 
to provide Members with low cost executions for their routable order 
flow. Furthermore, if Members do not favor the proposed pricing, they 
can send their routable orders directly to away markets instead of 
using routing functionality provided by the Exchange. Routing through 
the Exchange is voluntary, and the Exchange operates in a competitive 
environment where market participants can readily direct order flow to 
competing venues or providers of routing services if they deem fee 
levels to be excessive.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended. The 
proposed routing fee changes are designed to reflect changes being made 
to the System routing table used to determine where to send certain 
routable orders, and generally provide better pricing to members for 
orders routed to low cost protected market centers using the Exchange's 
routing strategies. The Exchange operates in a highly competitive 
market in which market participants can readily direct their order flow 
to competing venues. In such an environment, the Exchange must 
continually review, and consider adjusting, its fees and rebates to 
remain competitive with other exchanges. For the reasons described 
above, the Exchange believes that the proposed fee changes reflect this 
competitive environment.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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 \10\ and paragraph (f) of Rule 19b-4 \11\ 
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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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or

[[Page 22178]]

     Send an email to [email protected]. Please include 
File Number SR-CboeBYX-2019-008 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 Number SR-CboeBYX-2019-008. 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 the filing also will 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 Number SR-CboeBYX-2019-008 and should be submitted 
on or before June 6, 2019.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-10113 Filed 5-15-19; 8:45 am]
 BILLING CODE 8011-01-P