[Federal Register Volume 86, Number 46 (Thursday, March 11, 2021)]
[Notices]
[Pages 13948-13950]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05030]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91269; File No. SR-CboeBZX-2021-018]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Rule 11.13 (Order Execution and Routing), as Well as Its Fee Schedule, 
To Delete References to the INET, RDOX, and TRIMminus Routing Options

March 5, 2021.
    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 March 1, 2021, Cboe BZX Exchange, Inc. (``Exchange'' or ``BZX'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Exchange filed the proposal as 
a ``non-controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \3\ and Rule 19b-4(f)(6) thereunder.\4\ 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 Rule 11.13 (Order Execution and Routing), as well as its Fee 
Schedule, to delete references to the INET, RDOX, and TRIMminus 
(``TRIM-'') \5\ routing options. The text of the proposed rule change 
is provided in Exhibit 5.
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    \5\ TRIM- is not a term used in Exchange Rules. However, it is 
described in Rule 11.13(b)(3)(G).
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    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), 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 paragraphs (G), (H), (J), and (L) 
under Exchange Rule 11.13(b)(3) to delete all references to the INET, 
RDOX, and TRIM-routing options. The Exchange also proposes to delete 
all references to the INET and RDOX routing options from the BZX Fee 
Schedule, as provided [sic] fee codes J and D, respectively, and 
footnote 10. The Exchange intends to implement the proposed rule 
changes on March 1, 2021.
    Exchange Rule 11.13(b)(3) provides for various routing options 
available on the Exchange. In particular, [sic] 11.13(b)(3)(G)(iv) 
provides for the TRIM routing option under which a User may designate 
that an order first checks the System \6\ for available shares, and 
then routes to routes to [sic] Cboe BYX Exchange, Inc. (``BYX'') 
followed by the other destinations on the system routing table.\7\ The 
Exchange notes that TRIM

[[Page 13949]]

also has a variant routing strategy (TRIM-) in that a User \8\ may 
designate an order to skip the Exchange and otherwise send orders to 
the same venues as TRIM (i.e., BYX followed by the other destinations 
on the system routing table).\9\ Additionally, Rule 11.13(b)(3)(J) 
provides for the INET routing option, under which an order checks the 
System for available shares and then is sent to Nasdaq. If shares 
remain unexecuted after routing, they are posted on the Nasdaq book, 
unless otherwise instructed by the User. Similarly, Exchange Rule 
11.13(b)(3)(L) provides for the RDOX routing option, under which an 
order checks the System for available shares and then is sent to the 
NYSE and can be re-routed by the NYSE. If shares remain unexecuted 
after routing, they are posted on the NYSE book, unless otherwise 
instructed by the User.
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    \6\ The term ``System'' shall mean the electronic communications 
and trading facility designated by the Board through which 
securities orders of Users are consolidated for ranking, execution 
and, when applicable, routing away. See Exchange Rule 1.5(aa).
    \7\ 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. See Exchange Rule 
11.13(b)(3).
    \8\ The term ``User'' shall mean any Member or Sponsored 
Participant who is authorized to obtain access to the System 
pursuant to Rule 11.3. See Exchange Rule 1.5(cc).
    \9\ See Exchange Rule 11.13(b)(3)(G), which provides that in 
connection with routing strategies (iv) and (v) below (i.e., TRIM 
and SLIM, respectively), a User may designate that an order first 
routes to BYX, checks the System for available shares, and then 
routes to other destinations on the System routing table.
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    The Exchange has determined because few Users select the TRIM-, 
INET or RDOX routing options, the current demand does not warrant the 
infrastructure and ongoing maintenance expenses required to support the 
product. Therefore, the Exchange now proposes to delete INET and RDOX 
as a routing option as provided by Rule 11.13(b)(3)(J) and (L), 
respectively, and to delete the reference to TRIM- from Rule 
11.13(b)(3)(G).\10\
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    \10\ TRIM will still be available, but without TRIM- there will 
be no option for an order to bypass the local book. The proposal 
would eliminate the reference to TRIM- noted in Exchange Rule 
11.13(b)(3)(G). See supra note 9.
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    Given the proposed changes described above, the Exchange also 
proposes to amend Rule 11.13(b)(3)(H) to eliminate any reference to the 
INET and RDOX routing strategies. Specifically, Rule 11.13(b)(3)(H) 
provides for the Post to Away routing option, which routes the 
remainder of a routed order to and posts such order on the order book 
of a destination on the System routing table as specified by the User, 
and lists the specific routing options for which the Post to Away 
routing option may be combined. Both INET and RDOX are listed under 
Rule 11.13(b)(3)(H) as routing options that may be combined with the 
Post to Away routing option; therefore, the Exchange is proposing to 
eliminating [sic] all such references to INET and RDOX in Rule 
11.13(b)(3)(H).
    As the Exchange is proposing to eliminate the INET and RDOX routing 
options from the BZX Rulebook, the Exchange also proposes to eliminate 
any such reference to those routing options on the BZX Fee Schedule. 
Specifically, the Exchange proposes to eliminate RDOX from the 
description of Fee Code D,\11\ and eliminate INET from the description 
of Fee Code J.\12\ Additionally, the Exchange proposes to delete 
references to both RDOX and INET in footnote 10 of the Fee 
Schedule.\13\
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    \11\ Orders that yield fee code D are routed to NYSE using 
Destination Specific, RDOT, RDOX, or TRIM routing strategy, and are 
charged a fee of $0.00280.
    \12\ Orders that yield fee code J are routed to Nasdaq using 
Destination Specific or INET routing strategy, and are charged a fee 
of $0.00290.
    \13\ Footnote 10 of the Fee Schedule provides that executions 
that add liquidity in securities priced below $1.00 with an RDOT, 
RDOX, INET, and Post to Away routing option are charged no fee and 
given no rebate.
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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.\14\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
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. Additionally, 
the Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \16\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \14\ 15 U.S.C. 78f(b).
    \15\ 15 U.S.C. 78f(b)(5).
    \16\ Id.
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    In particular, the Exchange believes the proposed rule change to 
remove references to the TRIM-, RDOX, and INET routing options will 
remove impediments to the mechanism of a free and open market, thereby 
protecting investors and the public interest. As stated, the Exchange 
has noted that few Users elect the TRIM-, RDOX, and INET routing 
options and has determined that the current demand does not warrant the 
infrastructure and ongoing maintenance expense required to support 
these products. Therefore, the Exchange is discontinuing these routing 
options. The Exchange notes that routing through the Exchange is 
voluntary and alternative routing options offered by the Exchange as 
well as other methods remain available to Users that wish to route to 
other trading centers. In addition, neither the TRIM-, RDOX, nor the 
INET routing options are core product offerings by the Exchange, nor is 
the Exchange required by the Act to offer such products. By removing 
references to routing options that will no longer be offered by the 
Exchange, the Exchange believes the proposed rule change will remove 
impediments to the mechanism of a free and open market and protect 
investors by providing investors with rules that accurately reflect 
routing options currently available on the Exchange. Further, the 
Exchange does not believe that this proposal will permit unfair 
discrimination among customers, brokers, or dealers because the TRIM-, 
RDOX, and INET routing options will no longer be available to all 
Users.

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 to 
remove TRIM-, RDOX, and INET is not designed to address any competitive 
issues but rather to delete the TRIM-, RDOX, and INET routing options 
that are rarely used on the Exchange. As stated, the Exchange has noted 
that few Users elect the TRIM-, RDOX, and INET routing options and has 
determined that the current demand does not warrant the infrastructure 
and ongoing maintenance expense required to support these products. 
Therefore, the Exchange is discontinuing these routing options. The 
Exchange notes that routing through the Exchange is voluntary and 
alternative routing options offered by the Exchange as well as other 
methods remain available to Users that wish to route to other trading 
centers. In addition, neither the TRIM-, RDOX, nor the INET routing 
options are core product offerings by the Exchange, nor is the Exchange 
required by the Act to offer such products.

[[Page 13950]]

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 \17\ and Rule 19b-4(f)(6) \18\ thereunder 
because the proposal does not: (i) Significantly affect the protection 
of investors or the public interest; (ii) impose any significant burden 
on competition; and (iii) by its terms, become operative for 30 days 
from the date on which it was filed, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest.\19\
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    \17\ 15 U.S.C. 78s(b)(3)(A).
    \18\ 17 CFR 240.19b-4(f)(6).
    \19\ In addition, Rule 19b-4(f)(6)(iii) requires the Exchange to 
give the Commission written notice of the Exchange's intent to file 
the proposed rule change, along with a brief description and text of 
the proposed rule change, at least five business days prior to the 
date of filing of the proposed rule change, or such shorter time as 
designated by the Commission. The Exchange has satisfied this 
requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \20\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \21\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposal may become operative immediately upon filing. The Exchange 
states that waiver of the 30-day operative delay would immediately 
eliminate rules and references that account for services the Exchange 
planned to discontinue on March 1, 2021, thereby avoiding potential 
investor confusion during the operative delay period. Based on the 
foregoing, the Commission believes the waiver of the operative delay is 
consistent with the protection of investors and the public interest. 
Therefore, the Commission hereby waives the operative delay and 
designates the proposal operative upon filing.\22\
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    \20\ 17 CFR 240.19b-4(f)(6).
    \21\ 17 CFR 240.19b-4(f)(6)(iii).
    \22\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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.\23\
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    \23\ 15 U.S.C. 78s(b)(3)(C).
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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-CboeBZX-2021-018 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-CboeBZX-2021-018. 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-CboeBZX-2021-018 and should be submitted 
on or before April 1, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-05030 Filed 3-10-21; 8:45 am]
BILLING CODE 8011-01-P