[Federal Register Volume 85, Number 136 (Wednesday, July 15, 2020)]
[Notices]
[Pages 42946-42951]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-15214]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89282; File No. SR-CboeEDGX-2020-033]
Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change
Relating To Amend Its Fees Schedule
July 9, 2020.
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 July 1, 2020, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') filed with the Securities and Exchange Commission (the
``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 the
Substance of the Proposed Rule Change
Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX Options'') is
filing with the Securities and Exchange Commission (``Commission'') a
proposed rule change to amend its Fees Schedule. The text of the
proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Exchange's
[[Page 42947]]
website (http://markets.cboe.com/us/options/regulation/rule_filings/edgx/), 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 Fees Schedule for its options
platform (EDGX Options), specifically, certain Customer Volume Tiers
and Market Maker Volume Tiers, effective July 1, 2020.
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 options venues to which market participants
may direct their order flow. Based on publicly available information,
no single options exchange has more than 18% of the market share and
currently the Exchange represents only approximately 4% of the market
share.\3\ Thus, in such a low-concentrated and highly competitive
market, no single options exchange, including the 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 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.
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\3\ See Cboe Global Markets U.S. Options Market Monthly Volume
Summary (June 25, 2020), available at https://markets.cboe.com/us/options/market_statistics/.
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The Exchange's Fees Schedule sets forth standard rebates and rates
applied per contract. For example, the Exchange provides standard
rebates ranging from $0.01 up to $0.21 per contract for Customer orders
in both Penny and Non-Penny Securities and assesses fees ranging from
$0.01 up to $0.75 per contract for Market Maker, Away Market Maker,
Broker Dealer, Firm, Joint Back Office, and Professional orders in both
Penny and Non-Penny Securities. The Exchange also offers tiered pricing
which provides Members \4\ opportunities to qualify for higher rebates
or reduced fees where certain volume criteria and thresholds are met.
Footnote 1 of the Fee Schedule currently offers four Customer Volume
Tiers which provide enhanced rebates between $0.10 and $0.21 per
contract for qualifying Customer orders which meet certain liquidity
thresholds and yield fee code PC \5\ or NC.\6\ Footnote 2 of the Fee
Schedule currently offers eight Market Maker Volume Tiers which provide
reduced fees between $0.17 and $0.03 per contract for qualifying Market
Maker orders which meet certain liquidity thresholds and yield fee code
PM \7\ or NM.\8\ Under the current Customer Volume and Market Maker
Volume Tiers, a Member may receive an enhanced rebate where the Member
meets certain thresholds of ADV \9\ that are greater than or equal to a
percentage of average OCV \10\ for respective qualifying orders. The
Exchange now proposes to amend Customer Volume Tiers 1 through 4 and
Market Maker Volume Tiers 7 and 8.
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\4\ See Exchange Rule 1.5(n).
\5\ Fee code PC is appended to Customer, Penny orders and
receive a standard rebate of $0.01.
\6\ Fee code NC is appended to Customer Non-Penny orders and
receive a standard rebate of $0.01.
\7\ Fee code PM is appended to liquidity adding Market Maker,
Penny orders and are assessed a standard fee of $0.20.
\8\ Fee code NM is appended to liquidity adding Market Maker,
Non-Penny orders and are assessed a standard fee of $0.20.
\9\ ``ADV'' means average daily volume calculated as the number
of contracts added or removed, combined, per day. ADV is calculated
on a monthly basis, excluding contracts added or removed on any day
that the Exchange's system experiences a disruption that lasts for
more than 60 minutes during regular trading hours (``Exchange System
Disruption'') and on any day with a scheduled early market close.
\10\ ``OCV'' is Options Clearing Corporation (``OCC'') Customer
Volume which is the total equity and ETF options volume that clears
in the Customer range at the 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.
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The Exchange proposes to amend Customer Volume Tier 1 and 2 to
specify that a Member must reach an ADV in Customer orders that are
Non-Crossing orders (that is, orders not executed in a two sided
auction mechanism such as the Automated Improvement Mechanism (``AIM'')
or the Solicitation Auction Mechanism (``SAM'') or in a crossing
mechanism such as a Qualified Contingent Cross (``QCC'')). Currently,
both Tier 1 and Tier 2 provide that Members may achieve the respective
tiers if they achieve an ADV in Customer orders as a certain percentage
that is greater than or equal to average OCV. The Exchange proposes to
specify that, for these two tiers, Members receive the enhanced rebates
currently in place if they achieve an ADV in Customer Non-Crossing
orders as a certain percentage that is greater than or equal to average
OCV. The Exchange notes that the ADV thresholds of average OCV will
remain the same for these tiers. The Exchange is proposing to specify
that Customer Non-Crossing orders may be submitted in order to achieve
Customer Volume Tier 1 and Tier 2 as the Fee Schedule already provides
for opportunities for which Customer Crossing orders, specifically, may
achieve enhanced rebates comparable to the enhanced rebates offered
under Tiers 1 and 2.\11\ In this way, the Exchange believes the
proposed change will incentivize Members to submit more Non-Crossing
orders into the EDGX Options Book (as opposed to submitting more
Customer orders into the Exchange's crossing auctions/mechanisms to
achieve the tiers' criteria, which, as stated, already receive
comparable enhanced rebates and reduced fees under the Fee Schedule) in
order to achieve Customer Volume Tiers 1 and 2.
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\11\ See Fee Schedule, Footnote 6, AIM and SAM Pricing, which
provides an enhanced rebate of $0.11 (or does not assess a fee) for
qualifying Customer orders executed via the Exchange's crossing
auctions.; see also Footnote 7, QCC Initiator/Solicitation Rebate
Tiers, which provide enhanced rebates between $0.05 and $0.11 for
QCC Agency Orders or Solicitation Agency Orders.
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The Exchanges next proposes to amend Customer Volume Tiers 3 and 4
by increasing, in each, a percentage of ADV into average OCV within
existing criteria and adding to each tier a new, additional criteria
that a Member must meet to receive the existing enhanced rebate. The
Exchange notes that the proposed changes do not alter the current
enhanced rebates provided under Customer Volume Tier 3 and 4.
Specifically, Tier 3 currently provides an enhanced rebate of $0.21 for
Members that have an ADV in Customer
[[Page 42948]]
orders greater than or equal to 0.75% of average OCV. Tier 4 currently
also provides enhanced rebate of $0.21 for Members that have (1) an ADV
in Customer orders greater than or equal 0.60% of average OCV and (2)
an ADV in Customer or Market Maker orders greater than or equal to
1.00% of average OCV. The Exchange proposes to first increase the ADV
in Customer orders from greater than or equal to 0.75% to 1.00%
threshold of average OCV in Tier 3 and from greater than or equal to
0.60% to 0.75% threshold of average OCV in prong 1 in Tier 4. The
Exchange also proposes to add an additional prong of criteria in each
Tier 3 and Tier 4. As proposed, a Member may receive the existing
enhanced rebate under Tier 3 if the Member meets the current criteria
and, also, has an ADV in Customer Non-Crossing orders of greater than
or equal to 0.40% of average OCV. Likewise, a Member may receive the
existing enhanced rebate under Tier 4 if the Member meets the current
(two) criteria and, as proposed, has an ADV in Customer Non-Crossing
orders of greater than or equal to 0.40% of average OCV. The proposed
increases in Customer order ADV as a percentage of average OCV in Tier
3 and Tier 4 are intended to incrementally increase the level of
difficulty in achieving each of these tiers, thus, incentivizing
Members to increase their overall Customer order flow to the Exchange
by encouraging those Members to strive for the different, incrementally
more difficult tier criteria under the proposed tiers to receive the
enhanced rebates. The proposed additional prongs of criteria per each
tier are also designed to incrementally increase the level of
difficulty in achieving Tier 3 and Tier 4, while, like the proposed
changes to Tier 1 and Tier 2 described above, specifically
incentivizing Members to submit Non-Crossing Customer orders to the
Exchange's Order Book.
Likewise, the Exchange also proposes to amend Market Maker Volume
Tiers 7 and 8 by increasing, in each, certain percentages of ADV into
average OCV within existing criteria. Currently, Tier 7 provides a
reduced fee of $0.04 for Members that have (1) an ADV in Customer
orders greater than or equal to 0.30% of average OCV, (2) an ADV in
Customer or Market Maker orders greater than or equal to 0.50% of
average OCV, (3) an ADV in AIM Agency Orders greater than or equal to
0.15% of average OCV, and (4) an ADV in complex Customer orders
(yielding fee codes ZA, ZB, ZC, or ZD) \12\ greater than or equal to
5,000 contracts. Currently, Tier 8 provides a reduced fee of $0.03 for
Members that have (1) an ADV in Customer orders greater than or equal
to 0.70% of average OCV, (2) an ADV in Customer or Market Maker orders
greater than or equal to 1.10% of average OCV, (3) an ADV in AIM Agency
Orders greater than or equal to 0.15% of average OCV, and (4) an ADV in
complex Customer orders (yielding fee codes ZA, ZB, ZC, or ZD) greater
than or equal to 0.20% of average OCV. Regarding Tier 7, the Exchange
proposes to increase the percentage of ADV in Customer orders from
0.30% to 0.70%,of average OCV in prong 1, to increase the percentage of
ADV in AIM Agency Orders from 0.15% to 0.30% of average OCV in prong 3,
and to update prong 4 from ADV in complex Customer orders as greater
than or equal to 5,000 to greater than or equal to 0.10% of average
OCV. Regarding Tier 8, the Exchange proposes to increase the percentage
of ADV in Customer orders from 0.70% to 1.00% in prong 1, and to
increase the percentage of ADV in AIM Agency Orders from 0.15% to 0.75%
in prong 3. Like the proposed changes to Customer Volume Tiers 3 and 4,
the Exchange notes that the proposed changes to criteria in Market
Maker Volume Tiers 7 and 8 incrementally increase the level of
difficulty in achieving these tiers, thus, are designed to incentivize
Members to increase their Customer and/or AIM Agency order flow to the
Exchange by encouraging those Members to strive for the different,
incrementally more difficult tier criteria under the proposed tiers to
receive the reduced rates.
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\12\ Fee code ZA is appended to Complex Customer (contra Non-
Customer), Penny orders and receives a standard rebate of $0.45; fee
code ZB is appended to Complex Customer (contra Non-Customer), Non-
Penny orders and received a standard rebate of $0.80; fee code ZC is
appended to Complex Customer (contra Customer) orders and is
assessed no charge; and fee code ZD is appended to Complex Customer
order that legs into Simple Book and is assessed no charge.
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The Exchange believes that almost all of the proposed fee changes
are designed to incentivize more Customer order flow and, particularly,
a majority of the proposed changes are intended to direct an increase
of Customer order flow to the EDGX Options Order Book. An increase in
Customer order flow will create more trading opportunities, which, in
turn attracts Market-Makers. A resulting increase in Market-Maker
activity may facilitate tighter spreads, which may lead to an
additional increase of order flow from other market participants,
further contributing to a deeper, more liquid market to the benefit of
all market participants by creating a more robust and well-balanced
market ecosystem. Additionally, the proposed change in connection with
the AIM Agency order ADV threshold in Market Maker Volume Tier 8 is
intended to incentivize an increase in AIM Agency orders submitted to
an AIM auction in order to achieve the proposed tier. The Exchange
believes increased AIM Agency order flow results in price improvement
opportunities for customers.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the objectives of Section 6 of the Act,\13\ in general, and
furthers the objectives of Section 6(b)(4),\14\ in particular, as it is
designed to provide for the equitable allocation of reasonable dues,
fees and other charges among its Members and issuers and other persons
using its facilities. The Exchange also believes that the proposed rule
change is consistent with the objectives of Section 6(b)(5) \15\
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, and, particularly, is not
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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\13\ 15 U.S.C. 78f.
\14\ 15 U.S.C. 78f(b)(4).
\15\ 15 U.S.C. 78f.(b)(5).
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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 rule change
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.
In particular, the Exchange believes the proposed tiers are
reasonable because they amend existing opportunities in a manner that
incentivizes increased Customer or AIM Agency order flow via
incrementally more challenging criteria in order to receive the same
enhanced rebates or reduced fees on a Member's qualifying
[[Page 42949]]
orders. The Exchange notes that relative volume-based incentives and
discounts have been widely adopted by exchanges,\16\ including the
Exchange,\17\ 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. Additionally, as noted above, the Exchange operates in
a highly competitive market. The Exchange is only one of several
options venues to which market participants may direct their order
flow, and it represents a small percentage of the overall market.
Competing options exchanges offer similar tiered pricing structures to
that of the Exchange, including schedules of rebates and fees that
apply based upon members achieving certain volume and/or growth
thresholds and offer comparable pricing to members for achieving such
tiers.\18\
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\16\ See e.g., MIAX Options Fee Schedule, Section 1(a)(i), which
provides reduced fees (ranging from $0.03 to $0.30) for Market Maker
orders that reach various percentage thresholds of volume; and
Section 1(a)(iii), which provides certain credits (ranging from
$0.00 to $0.28) for Customer orders, including agency orders
submitted to an exchange auction, that reach various percentage
thresholds; and Cboe BZX U.S. Options Exchange Fee Schedule,
Footnote 1, Customer Penny Pilot Add Tiers; Footnote 6, Market Maker
Penny Pilot Add Volume Tiers; Footnote 7, Market Maker Non-Penny
Pilot Add Volume Tiers; and Footnote 12, Customer Non-Penny Pilot
Add Volume Tier, all of which provide various tier with different,
incrementally more difficult criteria, many of which are based on
average volumes as a percentage of average OCV.
\17\ See i.e., Cboe EDGX U.S. Options Exchange Fee Schedule,
Footnote 1, Customer Volume Tiers; and Footnote 2, Market Maker
Volume Tiers.
\18\ See supra note 16.
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The Exchange believes the proposed modification to specify that
Non-Crossing Customer order may be submitted in achieving the existing
criteria in Customer Volume Tiers 1 and 2, as well as the proposed
additional criteria in Customer Volume Tiers 3 and 4 for which a Member
must submit Non-Crossing Customer order ADV as a percentage of average
OCV, in order to receive the current enhanced rebates under Customer
Volume Tiers 1 through 4 is reasonable because it is designed to direct
Customer order flow to the Exchange's Order Book, as opposed to into
the Exchange's crossing auctions/mechanisms to achieve the tiers'
criteria, which already receive comparable enhanced rebates and reduced
fees under the Fee Schedule.\19\ An increase in Customer order flow to
the Order Book results in an increase of transaction opportunities
within the Order Book, attracting Market Maker quotes which, in turn,
facilitates tighter spreads on the Exchange and signals additional
corresponding increase in order flow from other market participants.
Increased overall order flow benefits all investors by deepening 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. Similarly, the proposed increases in overall Customer order
and AIM Agency order ADV as a percentage of OCV (as proposed within
Customer Volume Tiers 3 and 4 and Market Maker Volume Tiers 7 and 8)
are reasonable modifications to the existing criteria because they are
designed to incrementally increase the difficulty in achieving these
tiers, thereby incentivizing Members to increase their overall Customer
order flow and/or AIM Agency order flow, which benefits customers by
resulting in increased price improvement opportunities within the
auctions, to receive the exiting enhanced rebates and/or reduced fees.
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\19\ See supra note 11.
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Further, the Exchange believes that the proposed rule changes are
reasonable as they do not represent a significant departure from the
current criteria offered in the Fee Schedule and represent proportional
increases in difficulty per adjacent tiers. For example, the Exchange
proposes to simultaneously increase the Customer order ADV thresholds
of average OCV in Customer Volume Tier 3 and Tier 4 and provide the
same additional criteria in each. As a result, the Exchange believes
the level of difficulty in achieving Tier 3 and Tier 4 will remain
approximately the same. Likewise, the Exchange proposes to
simultaneously increase the ADV thresholds in the corresponding prongs
between Tier 7 and Tier 8. That is, prong 1 under both Tier 7 and Tier
8, criteria of which consists of Customer order ADV as a percentage of
average OCV, and prong 3 under both Tier 7 and Tier 8, criteria of
which consists of AIM Agency order ADV as a percentage of average OCV,
will experience incremental increases of ADV as a percentage of average
OCV. Thus, the step up in difficulty from Tier 7 to Tier 8 will remain
approximately the same. Additionally, the Exchange notes that the
proposed change in prong 4 under Tier 7 to amend the threshold of 5,000
contracts to 0.10% of average OCV is better aligned with, and is a
proportional step down from, the 0.20% of average OCV in corresponding
prong 4 under Tier 8. The Exchange again notes that the proposed rule
changes do not alter the amount of any of the current rebates or fees
in place.
The Exchange believes that the proposal represents an equitable
allocation of rebates and is not unfairly discriminatory because all
Members will continue to be eligible for Customer Volume Tiers 1
through 4 and Market Maker Volume Tiers 7 and 8, as amended. The
proposed changes to the tiers' criteria are designed as an incentive to
any and all Members interested in meeting the tier criteria to submit
additional Customer orders (with opportunities to achieve such tiers
via crossing and non-crossing orders), or AIM Agency orders to the
Exchange. Each will have the opportunity to submit the requisite order
flow and will receive the applicable existing enhanced rebate or
reduced fee if the tier criteria are 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 the proposed tiers. While the
Exchange has no way of predicting with certainty how the proposed tiers
will impact Member activity, the Exchange anticipates that
approximately three or four Members will be able to compete for and
achieve the amended criteria in each of Customer Volume Tier 1, 2, 3,
and 4, and at least four Members will be able to compete for and
achieve the amended criteria in each of Market Maker Volume Tier 7 and
Tier 8. The Exchange also notes that the proposed tiers will not
adversely impact any Member's pricing or their ability to qualify for
other rebate tiers. Rather, should a Member not meet the proposed
criteria for a tier, the Member will merely not receive the
corresponding enhanced rebate or reduced fee. Furthermore, the existing
rebate and fees will continue to uniformly apply to all Members that
meet the required criteria, as amended, per each respective tier.
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 intramarket or intermarket 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
[[Page 42950]]
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 proposed change
furthers 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.'' \20\
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\20\ Securities Exchange Act Release No. 51808, 70 FR 37495,
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
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The Exchange believes the proposed rule change does not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Particularly, the proposed
change applies to all Members equally in that all Members are eligible
to achieve the tiers' proposed criteria, have a reasonable opportunity
to meet the tiers' proposed criteria and will all receive the existing
enhanced rebates or reduced fees if such criteria is met. Overall, the
proposed change is designed to attract additional Customer and AIM
Agency order flow to the Exchange. The Exchange believes that the
modified tier criteria would incentivize market participants to strive
to increase such order flow to the Exchange to meet the proposed
criteria and, as a result, increase trading opportunities and attract
further Market-Maker activity, which would further incentivize the
provision of liquidity and continued order flow and improve price
transparency on the Exchange. Greater overall order flow and pricing
transparency benefits all market participants on the Exchange by
generally providing more trading opportunities, enhancing market
quality, and continuing to encourage Members to send orders, thereby
contributing towards a robust and well-balanced market ecosystem, which
benefits all market participants.
Next, the Exchange believes the proposed rule change does 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 15 other options exchanges and
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 options exchange has more
than 18% of the market share.\21\ 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.'' \22\ 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' . . . .''.\23\ 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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\21\ See supra note 3.
\22\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\23\ 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 \24\ and paragraph (f) of Rule 19b-4 \25\
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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\24\ 15 U.S.C. 78s(b)(3)(A).
\25\ 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
Send an email to [email protected]. Please include
File Number SR-CboeEDGX-2020-033 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-CboeEDGX-2020-033. 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
[[Page 42951]]
office of the Exchange. 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-
CboeEDGX-2020-033, and should be submitted on or before August 5, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\26\
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\26\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-15214 Filed 7-14-20; 8:45 am]
BILLING CODE 8011-01-P