[Federal Register Volume 87, Number 197 (Thursday, October 13, 2022)]
[Notices]
[Pages 62129-62137]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-22180]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96001; File No. SR-CBOE-2022-049]


Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Facility Fees Section in the Fees Schedule in Connection With the 
Exchange's New Trading Floor

October 6, 2022.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby 
given that on September 26, 2022, Cboe Exchange, Inc. (the ``Exchange'' 
or ``Cboe Options'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I 
and II 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend its Facility Fees section in the Fees Schedule in connection 
with the Exchange's new trading floor. 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 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 Fees Schedule in connection with 
the opening of a new trading floor.\4\ Until June 6, 2022, the Exchange 
conducted open outcry trading at 400 S. LaSalle, Chicago, Illinois 
(``LaSalle trading floor''). On June 6, 2022, the Exchange moved its 
open outcry trading operations to a new trading floor located at 141 W 
Jackson Blvd., Chicago, Illinois (``CBOT Building''). As a result of 
this transition, certain infrastructure and technology on the LaSalle 
trading floor were rendered obsolete, and the new trading floor in the 
CBOT Building has new infrastructure and offers new technology. 
Accordingly, the Exchange proposes to adopt new, and/or update current, 
facility fees with respect to the new trading floor, as well as 
eliminate obsolete facility fees that are only applicable to the 
Exchange's LaSalle facility and trading floor which is no longer in use 
as of June 6, 2022.
---------------------------------------------------------------------------

    \4\ The Exchange initially filed the proposed fee changes on 
June 1, 2022 (SR-CBOE-2022-026). On June 10, 2022, the Exchange 
withdrew that filing and submitted SR-CBOE-2022-029. On August 5, 
2022, the Exchange withdrew that filing and submitted SR-CBOE-2022-
042. The Exchange notes no comment letters were received for any 
previous filing. On September 26, 2022, the Exchange withdrew that 
filing and submitted this filing.
---------------------------------------------------------------------------

Booth Fees
    Under the current Fees Schedule, the Exchange assesses monthly fees 
for ``standard Booths'', which refers to a portion of designated space 
on the trading floor of the Exchange adjacent to or in particular 
trading crowds, which may be occupied by a Trading Permit Holder 
(``TPH''), clerks, runners, or other support staff for operational and 
other business-related activities. The Exchange assesses a monthly fee 
of $195 for standard Booths located along the perimeter of the trading 
floor, and $550 for standard Booths located in the OEX, Dow Jones, MNX 
and VIX trading crowds. The Exchange also assesses monthly fees for 
``nonstandard Booths'', which refers to space on the trading floor of 
the Exchange that is set off from a trading crowd, which may be rented 
by a TPH for whatever support, office, back-office, or any other 
business-related activities for which the TPH may choose to use the 
space. A TPH that rents non-standard booth space on the floor of the 
Exchange is subject to a base non-standard booth rental fee of $1,250 
per month in addition to a square footage fee of $1.70 per square foot 
per month based on the size of the TPH's non-standard booth. The 
Exchange proposes to modify and simplify its fees assessed for booth 
rentals. First, the Exchange proposes to eliminate the distinction 
between standard and non-standard Booths. The Exchange also proposes to 
adopt a tiered pricing schedule for Booths based on the number of 
Booths rented by a TPH. Particularly, the Exchange proposes to adopt 
the following fees for Booths that are set off from a trading crowd:

------------------------------------------------------------------------
                                                                Monthly
                      Quantity of booths                          fee
------------------------------------------------------------------------
1-2..........................................................       $400
3-6..........................................................        300
7-10.........................................................        200
11 or more...................................................        100
------------------------------------------------------------------------

    The proposed tiered pricing provides discounted pricing for 
additional Booths. For example, if a TPH rented 4 Booths, the TPH would 
be assessed $1,400 a month (2 Booths at $400 and 2 Booths at $300). The 
Exchange also proposes to adopt a monthly fee of $750 per booth for any 
booth located in a

[[Page 62130]]

trading crowd. The Booth Pass-Through Fee would remain unchanged.\5\ 
The Exchange notes that use of Booths, whether or located away from or 
in a trading crowd are optional and not necessary in order to conduct 
open outcry trading on the trading floor. Booth spaces are also uniform 
and nearly identical in size. The Exchange also notes that at this 
time, the Exchange has ample space on its new trading floor for booth 
space.
---------------------------------------------------------------------------

    \5\ Pursuant to the Booth Pass-Through Fee, TPHs bear 
responsibility for all costs associated with any modifications and 
alterations to any trading floor Booths leased by the TPH (or TPH 
organization) and must reimburse the Exchange for all costs incurred 
in connection therewith.
---------------------------------------------------------------------------

Policy
    The Exchange also proposes to update the Exchange's policy 
(``Policy'') regarding the rental and use of booth space on its trading 
floor by TPH organizations. The Exchange memorialized the Policy and 
filed it with the Commission in 1994.\6\ The Exchange proposes to 
update the Policy in a few respects. First, the Exchange proposes to 
change references to ``Chicago Board Options Exchange, Incorporated'' 
and ``CBOE'' to ``Cboe Exchange, Inc.,'' and ``Cboe Options'', 
respectively to reflect the Exchange's current legal name which has 
been updated since the last update to the Policy. The Exchange also 
proposes to update the rule reference relating to the Appeals process 
from Chapter ``19'' to Chapter ``15'' to reflect recent updates to the 
Exchange's rulebook.
---------------------------------------------------------------------------

    \6\ See Securities Exchange Act Release No. 33972 (April 28, 
1994), 59 FR 23242 (May 5, 1994).
---------------------------------------------------------------------------

    The Exchange notes the Policy includes a section that sets forth 
the requirement that all TPH organizations renting Booths execute a 
``Trading Floor Booth Rental Agreement'' (hereinafter, ``Agreement'') 
which sets forth the contractual terms, conditions and restrictions 
governing rental and use of Booths by TPH organizations.\7\ A copy of 
the Agreement was included in the Exchange's 1994 rule filing noted 
above for the Commission's information.\8\ The Agreement specifically 
sets forth the details of the parties' contractual relationship 
regarding rental and use of the Booths. Among other provisions, the 
Agreement includes specific provisions delineating the termination 
rights of both the TPH organization and the Exchange and sets forth a 
procedure for adding Booths to and deleting Booths from the Agreement. 
The Agreement also spells out requirements respecting the TPH's use of 
the Booths, such as those governing the installation of equipment, the 
conduct of business, and access of persons to the Booths.
---------------------------------------------------------------------------

    \7\ The Agreement is non-negotiable and its terms are the same 
for every TPH organization.
    \8\ See Securities Exchange Act Release No. 33972 (April 28, 
1994), 59 FR 23242 (May 5, 1994).
---------------------------------------------------------------------------

    The Exchange has updated the Agreement (which is now referred to as 
the Agreement for ``standard Booths''). In 2012, the Exchange also 
created a separate form of the Agreement for non-standard Booths.\9\ In 
connection with the proposal to eliminate non-standard Booths, the 
Exchange proposes to eliminate use of that agreement. A copy of the 
standard form of Agreement is included with this filing in Exhibit 3. 
The Exchange proposes to update this section of the Policy to eliminate 
references to the non-standard booth agreement. The Exchange also 
proposes to update the Agreement to (i) change references to ``Chicago 
Board Options Exchange, Incorporated'' and ``CBOE'' to ``Cboe Exchange, 
Inc.,'' and ``Cboe Options'', respectively; (ii) update the link to 
where the Cboe Options Fees Schedule can be found; (iii) eliminate the 
requirement for Cboe to provide TPH organizations with a copy of TPH 
Organization's current booth assignments, as it no longer believes such 
record is necessary or desired by TPHs; and (iv) eliminate Section 13, 
which prohibits TPH Organizations leasing SPX arbitrage Booths from 
installing data equipment in such Booths, as the Exchange does not 
intend to provide such Booths and to the extent it determines to do so 
in the future does not anticipate maintaining such prohibition. The 
Exchange will disseminate the updated Policy and forms of the Agreement 
to TPHs by posting them on the Trading Permit Holder portion of the 
Cboe website.
---------------------------------------------------------------------------

    \9\ See Securities Exchange Act Release No. 66727 (April 9, 
2012), 77 FR 21134 (April 3, 2012) (SR-CBOE-2012-025).
---------------------------------------------------------------------------

Line to Cboe Floor Network
    On the LaSalle trading floor, TPHs used various lines and 
telecommunications (``telco'') circuits to connect to the trading 
floor. Independent wiring had to be used for each line or telco 
circuit, which means firms may have needed to relocate their lines or 
telco circuits if they moved into, or relocated to, a new trading space 
or Booth. These telco circuits are also on a per device basis. The new 
trading floor utilizes a single floor network (i.e., ``Cboe Floor 
Network'') for TPHs' devices consisting of both wired jacks and 
wireless network access located at kiosks, in trading pits, and in 
Booths throughout the new trading floor. As such, unlike the LaSalle 
trading floor infrastructure, TPHs do not need to order lines from the 
Exchange to specific locations on the floor. Rather, a TPH only needs 
to order one Ethernet port (``Line'') (or a pair for redundancy) to 
connect to the Cboe Floor Network and will be able to connect their 
devices to the Exchange's network anywhere on the trading floor through 
wired jack ports or the wireless network. Additionally, firms no longer 
need to provide network equipment to support dedicated lines to the 
floor, as on the new trading floor the Exchange provides the network 
switches and local area network (LAN) lines for all firms.
    The Exchange believes the new trading floor will provide TPHs more 
flexibility to move and relocate as needed, as compared to the LaSalle 
trading floor. If a TPH wished to relocate trading spaces or trading 
booths on the LaSalle trading floor, it could have triggered 
installation, relocation and removal of various lines and circuits, 
which subsequently triggered various installation, relocation and 
removal fees.\10\ For example, on the LaSalle trading floor, if a 
Market-Maker needed to move to a new trading space, it may have needed 
to relocate the lines or circuits from its current space to the new 
space and would be subject to relocation fees such as $129 relocation 
fee to relocate any Exchangefones and $200 relocation fee for 
relocation of any Market-Maker Handheld Terminal.\11\ As another 
example, if a TPH needed to relocate to a new Booth, it may have been 
subject to a relocation fee of $625 for relocating lines from the 
trading floor to local carriers or the Communications Center.\12\ Since 
all network access is wireless or plug and play at any location on the 
new trading floor, the new infrastructure eliminates the need for 
installation of multiple lines, as well as relocation and removal of 
connectivity lines to devices and also renders the following Lines fees 
(including fees relating to installation, relocation and removal) 
obsolete: Intra-Floor, Voice Circuits, Appearances, Data Circuits at 
Local Carrier, and Data Circuits at In-House Frame. The Exchange 
therefore proposes to instead adopt a monthly fee of $350 per Line and 
notes it does not expect TPHs to purchase more than one Line and one 
redundant Line. The Exchange also proposes to adopt a one-time $500

[[Page 62131]]

installation fee for the installation of the line to the Cboe Floor 
Network, which is a pass-through fee of what the Exchange is assessed 
by the building within which the new trading floor resides (i.e., the 
CBOT Building). The proposed $500 installation fee would include 
installation of a redundant line at no additional cost and allows the 
Exchange to recoup the costs it incurs from third-party vendors for the 
installation of the Lines.
---------------------------------------------------------------------------

    \10\ See Cboe Options Fees Schedule, Lines Table.
    \11\ See Cboe Options Fees Schedule, Communications Table, 
Exchangefone and Miscellaneous Table, Market-Maker Handheld Terminal 
Tethering Services.
    \12\ See Cboe Options Fees Schedule, Lines Table, Lines Direct 
from Local Carrier to Trading Floor and Lines Between Communication 
Center and Trading Floor.
---------------------------------------------------------------------------

Co-Location and Meet-Me-Room
    For a monthly fee, the Exchange historically has provided TPHs (and 
third-party vendors, collectively ``firms'') with cabinet space in its 
building for placement of network and server hardware. Particularly, 
TPHs are charged a monthly fee of $50 per ``U'' of shelf space \13\ and 
Sponsored Users \14\ are assessed a monthly fee of $100 per ``U''. Fees 
are charged in increments of 4 ``U'' (i.e., a minimum of $200 per 4 
``U'' is charged or, for Sponsored Users, a minimum of $400 per 4 ``U'' 
is charged). A firm also receives power, cooling, security and 
assistance with installation and connection of the equipment to the 
Exchange's servers, at no additional charge.
---------------------------------------------------------------------------

    \13\ The term ``U'' is used to indicate an equipment unit 1.75'' 
high with a maximum power of 125 watts per U space. Per the Fees 
Schedule, Co-Location fees are charged in increments of 4 ``U'' (7 
inches).
    \14\ See Cboe Options Rule 3.60.
---------------------------------------------------------------------------

    The Exchange will continue to provide firms cabinet space in the 
new facility (``Meet-me-Room'') for placement of network and server 
hardware at the same rate of $50 per ``U'', billed in increments of 4 
``U''. The Exchange proposes however to eliminate the separate rate for 
Co-Location of Equipment Fee for Sponsored Users, as the Exchange does 
not currently have any Sponsored Users, nor has it had any Sponsored 
users in several years. As such, the Exchange no longer believes its 
necessary to maintain a separate rate for Sponsored Users.\15\ The 
Exchange also proposes to relocate the ``Co-Location'' section in the 
Fees Schedule to immediately follow the ``Lines'' section in the Fees 
Schedule, as it believes such fees are more appropriately grouped 
together and will make the Fees Schedule easier to read and follow. The 
Exchange also believes it will make the Fees Schedule easier to read 
and follow if it reflects the rate of the minimum increment charged, 
instead of a broken-out rate that can never be assessed. As noted 
above, the Fees Schedule currently sets forth the monthly rate per 
``U'' (i.e., ``$50 per ``U''), even though it states it only charges in 
increments of 4 ``U'' (i.e., fee is really $200 per 4 ``U''). The 
Exchange will continue to charge in increments of 4 ``U'' in the new 
facility and therefore proposes to update the fee language in the 
relocated line item to reflect the rate for the minimum increment of 4 
``U''. Despite this language change, the Exchange reiterates it is not 
changing the amount assessed for the Co-Location of Equipment Fee. 
Within the new Meet-me-Room however, the Exchange is proposing to limit 
firms to 8 ``U'' in order to ensure all firms can be accommodated in 
the Meet-me-Room.
---------------------------------------------------------------------------

    \15\ To the extent the Exchange has Sponsored Users in the 
future, such participants will be assessed the same rate as all 
other firms (i.e., $50 per ``U'', billed in minimum increments of 4 
``U'').
---------------------------------------------------------------------------

    The Exchange next proposes to adopt monthly and installation fees 
for cross connects, including telecommunication (i.e., telco) and Cboe 
Floor Network cross connects,\16\ within the Meet-Me-Room. 
Particularly, each cross connect will be subject to a $25 per month per 
cross connect fee, which is a pass-through fee of what the Exchange is 
assessed by the CBOT Building for each cross connect. Additionally, 
firms will be subject to a one-time $500 installation fee for each 
cross connection, which is also a pass-through fee of what the Exchange 
is assessed by the CBOT Building. The Exchange notes that at the 
LaSalle trading floor, the Exchange assessed third-party vendors a $50 
per month fee for ``Data Circuits from Local Carrier to Equipment 
Shelf'' which offers similar cross-connectivity from Local Carriers 
(telco providers) to a firm's equipment shelf in the current meet-me-
room. The Exchange no longer uses data circuits from Local Carriers to 
equipment on the shelf and proposes to therefore eliminate this fee 
(currently under the Vendor Services section) from the Fee Schedule.
---------------------------------------------------------------------------

    \16\ The Exchange offers fiber cross connect. The cross connects 
may run between a firm's hardware to a third-party 
telecommunications service or the Cboe Floor Network switches that 
will service the trading floor.
---------------------------------------------------------------------------

    The Exchange next proposes to adopt a fee relating to accessing the 
Meet-me-Room. Particularly, in order for a firm to access the Meet-me-
Room (e.g., if they need technical support), they must request access. 
The Exchange notes that because the Meet-me-Room now resides in a 
building not owned by the Exchange, the Exchange is assessed a fee by a 
third-party (CBOT Building) for providing firms access to the Meet-me-
Room. The Exchange notes that the CBOT Building requires individuals 
accessing the Meet-me-Room to be accompanied by CBOT Building 
representatives and therefore assesses a fee associated with the visit. 
Exchange staff personnel are also present for each visit. The Exchange 
therefore proposes to adopt a fee to recoup fees it is billed by the 
CBOT Building for providing this access (``Cboe Datacenter Services''). 
Specifically, the Exchange proposes to assess a fee of $100 per half-
hour (with a 1 hour minimum required). The Exchange notes that it 
waived this fee for the month of June 2022.\17\ Particularly, the 
Exchange believed that firms may have had a greater need during the 
first month of operations on the new trading floor to visit the Meet-
me-Room. The waiver therefore allowed firms to respond to any potential 
issues that may have arisen in the Meet-me-Room during the first month 
at no additional cost. The Exchange anticipates that firm requests for 
this type of access will be infrequent going forward. The Exchange also 
notes that it similarly assessed fees for various third-party technical 
support or vendor services on the LaSalle trading floor.\18\ However, 
these services are no longer available in the new trading floor and the 
Exchange therefore proposes to eliminate the following corresponding 
fees: Technical Support Outside Normal Hours, IPC (vendor) Time & 
Material, IPC (vendor) Time & Material Overtime, After Hours Technician 
Service, Market-Maker Handheld Tethering Services, and Market-Maker 
Handheld Tethering Services For Indexes.
---------------------------------------------------------------------------

    \17\ See Securities Exchange Act Release No. 95155 (June 24, 
2022), 87 FR 39145 (June 30, 2022) (SR-CBOE-2022-029).
    \18\ See Cboe Options Fees Schedule, Vendor Services, Technical 
Support Outside Normal Hours, and Miscellaneous, IPC (vendor) Time & 
Material, IPC (vendor) Time & Material Overtime, After Hours 
Technician Service, Market-Maker Handheld Tethering Services, and 
Market-Maker Handheld Tethering Services For Indexes.
---------------------------------------------------------------------------

Trading Floor Device Fees
    The Exchange currently lists various fees under the Trading Floor 
Terminal Rentals section of the Facility Fees table.\19\ For example, 
TPHs are currently assessed $125 per month for ``PAR Workstations'' to 
help offset hardware costs incurred by the Exchange in making PAR 
workstations available to TPHs. A PAR (Public Automated Routing System) 
Workstation is an Exchange-provided order management tool for use on 
the Exchange's trading floor by TPHs and PAR Officials to manually 
handle orders pursuant to the Rules and facilitate open outcry trading. 
Access to PAR is only available on Exchange-provided tablets (currently 
Surface Tablets) and the current

[[Page 62132]]

monthly fee covers both the Exchange-provided tablet and PAR access. In 
connection with the transition to the new trading floor, the Exchange 
proposes to modify the way it assesses fees for use of PAR \20\ and 
also adopt fees for non-Exchange provided tablets that connect to the 
Exchange's network. Particularly, the Exchange proposes to adopt a 
separate monthly Exchange Tablet fee of $140 for any tablet provided by 
the Exchange and a separate monthly fee of $45 to access PAR. TPHs will 
continue to utilize PAR on the new trading floor, which will continue 
to only be available on Exchange-provided tablets. Exchange tablets 
used for PAR may also be used for access to Silexx.\21\
---------------------------------------------------------------------------

    \19\ The Exchange proposes to rename this section ``Trading 
Floor Device Fees''.
    \20\ The Exchange proposes to replace the reference to ``PAR 
Workstation'' to ``PAR Access''. Particularly, the current version 
of PAR is no longer a physical touch screen terminal (i.e., 
workstation) but an order management tool that can be accessed on a 
tablet such as a Surface.
    \21\ Silexx is a User-optional order entry and management 
trading platform. The Silexx platform consists of a ``front-end'' 
order entry and management trading platform (also referred to as the 
``Silexx terminal'') for listed stocks and options that supports 
both simple and complex orders, and a ``back-end'' platform which 
provides a connection to the infrastructure network. The Silexx 
front-end and back-end platforms are a software application that is 
installed locally on a user's laptop.
---------------------------------------------------------------------------

    The Exchange also proposes to adopt a separate Exchange Tablet fee 
as TPHs will have the option of using Exchange-provided tablets for 
Cloud9, which is the new telecommunication system the Exchange offers 
on the new trading floor.\22\ The Exchange notes that TPHs have the 
option of using their own tablet to access Cloud9 in lieu of using an 
Exchange-provided tablet. Such tablets would be subject to the ``TPH-
Owned Device Authentication Fee'' described more fully below.
---------------------------------------------------------------------------

    \22\ Cloud9 is the voice communication solution for the new 
trading floor. Cloud9 is a VoIP cloud-based service offering a 
traditional turret, the Cloud Hub. The Cloud Hub will be provided by 
Cboe and will need to connect to a laptop or device provided either 
by the TPH or by Cboe. TPHs may not use the same Exchange Tablet for 
both PAR and Cloud9.
---------------------------------------------------------------------------

    On the new trading floor, TPHs will be able to use a variety of 
devices such as tablets, laptops, Market-Maker handheld devices, 
printers, and phone systems. TPHs will be able to connect these devices 
to the Exchange's network anywhere on the trading floor through wired 
jack ports or the wireless network on the trading floor, as long as 
they are onboarded to the Cboe Network Authentication System. The 
Exchange proposes to assess a fee for TPH-owned devices that connect to 
the Exchange's network on the new trading floor (``TPH-Owned Device 
Authentication Fee''). Particularly, the Exchange proposes to assess a 
fee of $100 per authenticated connection (i.e., when a device connects 
to the wired jack and/or wireless network on the trading floor).\23\ 
The proposed fee will be based on the maximum number of concurrent 
authenticated connections made during market hours during the calendar 
month. As discussed above, the Exchange believes the new trading floor 
provides TPHs more flexibility to move and relocate any of their 
devices by eliminating the need for installation, relocation and 
removal of connectivity lines to devices. Consequently, corresponding 
monthly, installation, relocation and removal fees will also be 
eliminated on the new trading floor.
---------------------------------------------------------------------------

    \23\ For example, a TPH that connects to Cloud9 using its own 
laptop would be assessed $100 per month for that connection. If that 
same TPH chooses to connect an additional laptop and a printer to 
the network, that TPH will be assessed a total of $300 per month 
(i.e., $100 for each of the tablet used for Cloud9, the laptop and 
the printer).
---------------------------------------------------------------------------

Replacement Fees
    The Exchange currently assesses fees related for certain hardware 
that needs to be replaced because of loss or because of non-normal wear 
and tear. Particularly, the Exchange assesses the following replacement 
fees:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Replacement Tablet.......................  $1,300 each.
Replacement Stylus Pen...................  $100 each.
Replacement Chargers.....................  $75 each.
Replacement Adapters and Protective Cases  $50 each.
------------------------------------------------------------------------

    The Exchange proposes to maintain these replacement fees on the new 
trading floor. However, the Exchange proposes to increase the fee to 
replace a table from $1,300 per tablet to $1,400 per tablet to reflect 
increased costs to the Exchange. The Exchange also proposes to adopt a 
new replacement fee for lost Access Badges at the rate of $100 per 
badge in order to encourage TPHs to hold onto their badges and not 
misplace them.
Obsolete Fees
    The Exchange next proposes to eliminate fees assessed for 
technology and infrastructure and related services that will be 
rendered obsolete upon the transition to the new trading floor. 
Particularly, the Exchange proposes to eliminate the following fees 
that have not otherwise been discussed above:

------------------------------------------------------------------------
               Description                              Fee
------------------------------------------------------------------------
Arbitrage Phone Positions................  $550/month.
HP Laser Printer Paper...................  $5.00 per packet of 500
                                            sheets.
Zebra Printer Papers.....................  $19.50 per roll.
Zebra Printer Ink........................  $19.50 per roll.
Forms Storage............................  $11.
Exchangefone.............................  $935/installation; $129/
                                            relocation; $100/removal.
Exchangefone--Maintenance................  $57/month.
Exchangefone--With Recorded Coupler        $126/relocation.
 Between Booths.
Exchangefone--Within Booth...............  $25/relocation.
Single Line--Maintenance.................  $11.50/month.
Phone Rentals--Monthly Fee...............  $110/month.
Phone Rentals--Replacement Repairs.......  cost.
Lines--Intra Floor.......................  $57.75/per month.
Lines--Voice Circuits....................  $16/month; $52.50/
                                            installation; $36.75/
                                            removal.
New Circuits--First......................  $120/installation; $50/
                                            removal.
New Circuits--@Additional................  $18/installation; $18/
                                            removal.
Existing Line Appearance--First..........  $50/installation; $25/
                                            removal.
Existing Line Appearance--A Additional...  $18/installation: $18/
                                            removal.
Data Circuits (DC) at Local Carrier        $16/month; $52.50/
 (entrance).                                installation; $36.75
                                            removal.
DC @In-House Frame--Lines between Local    $12.75/month; $550/
 Carrier and Comms Center.                  installation.
DC @In-House Frame--Lines Between Comms    $12.75/month; $725/
 Center and Trading Floor.                  installation; $625/
                                            relocation.
DC @In-House Frame--Lines Direct from      $12.75/month; $725/
 Local Carrier to Trading Floor.            installation; $625/
                                            relocation.
Shelf for Equipment......................  $100/month.
Lines from Equipment to Floor............  $50/month.

[[Page 62133]]

 
Handsets.................................  $79/installation.
Headset Jack.............................  $131/installation; $58
                                            relocation; $28/removal.
Recorder Coupler.........................  $150 new/$50 existing
                                            installation; $25/
                                            relocation; $25/removal.
Thomson/Other (Basic Service)............  $425/month.
Satellite TV.............................  $50/month.
Cboe Options Trading Floor Terminal......  $250/month; $175/
                                            installation; $225
                                            relocation; $125/removal.
Trading Floor Printer Maintenance \24\...  $75/month.
------------------------------------------------------------------------

    The Exchange also proposes to eliminate all PULSe Workstation fees 
as PULSe was decommissioned in January 2021, but the Exchange 
inadvertently did not delete references to PULSe-related fees at that 
time.
---------------------------------------------------------------------------

    \24\ The Exchange proposes to eliminate a corresponding 
reference in Footnote 50 to Trading Floor Printer Maintenance in 
light of the proposal to eliminate this fee.
---------------------------------------------------------------------------

Temporary Fees
    In June 2020, the Exchange adopted Footnote 24 of the Fees Schedule 
to govern pricing changes that would apply for the duration of time the 
Exchange trading floor was being operated in a modified manner in 
connection with the COVID-19 pandemic. By way of background, the 
Exchange closed its trading floor on March 16, 2020 due to the COVID-19 
pandemic and reopened its trading floor on June 15, 2020, but with a 
modified configuration of trading crowds in order to implement social 
distancing and other measures consistent with local and state health 
and safety guidelines to help protect the safety and welfare of 
individuals accessing the trading floor. As a result, the Exchange 
relocated and modified the physical area of certain trading crowds and 
also determined and reduced how many floor participants may access the 
trading floor. In connection with these changes, the Exchange proposed 
a number of modified billing changes that would remain in place for the 
duration of the time the Exchange operated in a modified manner. 
Particularly, the following fees are modified when the Exchange is 
operating in a modified state due to the COVID-19 pandemic:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
Trading Permits...................  Floor trading permit fees are not to
                                     be assessed on the total number of
                                     floor trading permits a TPH
                                     organization holds, and instead are
                                     based on the floor trading permits
                                     used by nominees of the TPH each
                                     day during the month using the
                                     following formula: (i) the number
                                     of floor trading permits that have
                                     a nominee assigned to it in the
                                     Customer Web Portal system
                                     (``Portal'') in a given month,
                                     multiplied by the number of trading
                                     days that the floor is open and
                                     that a nominee is assigned to each
                                     respective trading permit in that
                                     month, divided by (ii) the total
                                     number of trading days in a month.
                                     The Exchange rounds up to determine
                                     the total number of trading permits
                                     assessed the fees set forth in the
                                     Floor Trading Permit Sliding
                                     Scales.
SPX Tier Appointment Fee..........  The monthly fee for the SPX/SPXW
                                     Floor Market-Maker Tier Appointment
                                     Fee will be increased to $5,000 per
                                     Trading Permit from $3,000 per
                                     Trading Permit.
Inactive Nominee Status (Parking    $300 Parking Space Fees is not
 Space).                             applied.
Inactive Nominee Status Change      $100 Trading Permit Swap Fee is not
 (Trading Permit Swap).              applied.
SPX/SPXW and SPESG Floor Brokerage  SPX/SPXW and SPESG Floor Brokerage
 Fees.                               Fees are be assessed the rate of
                                     $0.05 per contract for non-crossed
                                     orders and $0.03 per contract for
                                     crossed order instead of $0.04 and
                                     $0.02, respectively.
Facility Fees.....................  Monthly fees are waived for the
                                     following facilities fees:
                                     arbitrage phone positions and
                                     satellite tv. If a TPH is unable to
                                     utilize designated facility
                                     services while the trading floor is
                                     operating in a modified state,
                                     corresponding fees, including for
                                     standard and non-standard booth
                                     rentals, Exchangefone maintenance,
                                     single line maintenance, intra
                                     floor lines, voice circuits, data
                                     circuits at local carrier
                                     (entrance), and data circuits at in-
                                     house frame, are waived.
------------------------------------------------------------------------

    The Exchange notes that while the LaSalle trading floor utilized 
social distancing and reconfigured trading crowds through its closure 
(and therefore was considered to be operating in a modified manner), it 
does not believe it was necessary to implement such safety measures on 
the new trading floor at the time of transition given recent 
developments relating to the COVID-19 pandemic. As such, upon moving to 
the new trading floor on June 6, 2022, the Exchange no longer operates 
in a modified manner and Footnote 24 does not apply. Accordingly, (1) 
Floor Trading Permit fees will be assessed based on the total number of 
floor trading permits a TPH holds each month; (2) Parking Space and 
Trading Swap fees will no longer be waived; (3) the SPX Floor Tier 
Appointment Fee will be assessed $3,000 (instead of $5,000) \25\ and 
(iv) SPX/SPXW and SPESG Floor Brokerage fees will be assessed $0.04 per 
contract for non-crossed orders (instead of $0.05 per contract) and 
$0.02 per contract for crossed orders (instead of $0.03 per contract). 
As noted above, arbitrage phone positions, satellite tv, Exchangefone 
maintenance, single line maintenance, intra floor lines, voice 
circuits, data circuits at local carrier (entrance), and data circuits 
at in-house frame are eliminated as of June 1, 2022 so the Exchange 
proposes to also eliminate references to such fees from Footnote 24.
---------------------------------------------------------------------------

    \25\ The Exchange intends to contemporaneously submit a separate 
rule filing to modify the fee for the SPX Floor Tier Appointment 
Fee.
---------------------------------------------------------------------------

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.\26\ Specifically, the 
Exchange believes the proposed rule

[[Page 62134]]

change is consistent with the Section 6(b)(5) \27\ 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) \28\ requirement that the rules of an exchange not be designed 
to permit unfair discrimination between customers, issuers, brokers, or 
dealers.
---------------------------------------------------------------------------

    \26\ 15 U.S.C. 78f(b).
    \27\ 15 U.S.C. 78f(b)(5).
    \28\ Id.
---------------------------------------------------------------------------

    As discussed above, the proposed changes are prompted by the 
Exchange's recent transition from its previous trading floor, which it 
had occupied since the 1980s, to a brand new, modern and upgraded 
trading floor facility. The Exchange believes customers continue to 
find value in open outcry trading and rely on the floor for price 
discovery and the deep liquidity provided by floor Market-Makers and 
Floor Brokers. The Exchange believes the build out of a new modern 
trading floor is therefore consistent with its commitment to open 
outcry trading and focus on providing the best possible trading 
experience for its customers. Indeed, the new trading floor provides a 
state-of-the-art environment and technology and more efficient use of 
physical space, which the Exchange believes better reflects and 
supports the current trading environment. The Exchange also believes 
the new infrastructure provides a cost-effective, streamlined, and 
modernized approach to floor connectivity. For example, the new trading 
floor has more than 330 individual kiosks, equipped with top-of-the-
line technology, that enable floor participants to plug in and use 
their devices with greater ease and flexibility. It also provides floor 
Market-Makers and Floor Brokers with more space and increased capacity 
to support additional floor-based traders on the trading floor. 
Moreover, the new trading floor is conveniently located across the 
street from the LaSalle trading floor, resulting in minimal disruption 
to TPH floor participants, many of whom have office space nearby, 
including in the CBOT Building. The Exchange believes the CBOT 
Building, which was also home to the Exchange's original trading floor 
in the 1970s and early 1980s, is also able to support robust trading 
floor infrastructure as it currently hosts several banks, trading firms 
and even trading floors (i.e., trading floors for the Chicago 
Mercantile Exchange and BOX Options Market).
    As described above, the recent transition rendered much of the 
Exchange's previous trading floor technology and infrastructure 
obsolete, as it has been replaced by new infrastructure in a new 
building (no longer owned by the Exchange). As such, the proposed 
modifications to corresponding facility fees are not only necessary, 
but the Exchange believes reasonable, equitable and not unfairly 
discriminatory as discussed in further detail below. The Exchange also 
believes the proposed rule change results in a streamlined and 
simplified trading floor and facility fee structure.
Booth Fees
    The Exchange believes the proposed Booth Fees are reasonable as 
they are not a significant departure from fees that were assessed for 
Booths on the LaSalle trading floor (and in some instances are even 
lower than currently assessed). Additionally, the Booths on the new 
trading floor are slightly larger than the standard Booths that were 
available on the LaSalle trading floor. The proposed fees are also in 
line with similar fees charged currently and historically at other 
exchanges with a physical trading floor.\29\ The Exchange believes that 
the proposed booth space fee is equitable and not unfairly 
discriminatory because it applies uniformly to trading floor 
participants who choose to rent Booths (and all booths are uniform and 
nearly identical in size). Moreover, the use of Booths, whether located 
away from or in a trading crowd, are optional and not necessary in 
order to conduct open outcry trading on the trading floor.
---------------------------------------------------------------------------

    \29\ In 2011, Nasdaq PHLX charged a flat $300 per month fee for 
Trading/Administrative Booth paid by floor brokers and clearing 
firms. See Securities Exchange Act Release No. 34-66086 (January 3, 
2012), 77 FR 1111 (January 9, 2012) (SR-Phlx-2011-181). NYSE 
American currently assesses $40 per linear foot per month for all 
booth space utilized by such Floor Broker.
---------------------------------------------------------------------------

    The Exchange believes the proposed rule changes to the Booth Policy 
and Agreement make non-substantive changes that merely clarify the 
Policy and Agreement, make it more accurate, and alleviate potential 
confusion, thereby removing impediments to and perfecting the mechanism 
of a free and open market and a national market system, and, in 
general, protecting investors and the public interest. The Exchange 
believes that notwithstanding any of the proposed changes, the Booth 
Policy and Agreement continues to ensure that trading floor Booths are 
leased to TPH organizations on equal and non-discriminatory terms.
Line to Cboe Floor Network
    The Exchange believes the proposed Line to Cboe Floor Network fee 
is reasonable as TPHs will not be subject to the current lines and 
circuit fees set forth in the Fees Schedule, including for relocation 
and removal, that are assessed on the LaSalle trading floor for similar 
connectivity to the trading floor network. Additionally, unlike the 
current floor which requires independent wiring be used for each line 
or circuit and on a per device basis, the new trading floor will allow 
TPHs to maintain one Line (or 2 for redundancy purposes). Accordingly, 
the new trading floor will provide TPHs more flexibility to move and 
relocate as needed and with greater ease and be able to do so without 
incurring additional relocation and removal fees. Moreover, firms will 
no longer need to provide their own network equipment to support 
dedicated lines to the floor as the Exchange will be providing the 
network switches and local area network (LAN) lines for all firms on 
the new trading floor. The Exchange notes that on the LaSalle trading 
floor, TPHs had to supply their own pair of network switches, which the 
Exchange estimates cost approximately $5,000 for each switch (i.e., 
$10,000 total), in addition to ongoing costs incurred for vendor 
support and staff personnel time. Under the proposal, TPHs are no 
longer subject to these costs, as the Exchange provides both the 
network switches and ongoing support. The Exchange also notes other 
exchanges assess a variety of facility fees relating to connectivity 
and equipment in order to maintain their trading floor facilities.\30\
---------------------------------------------------------------------------

    \30\ For example, Nasdaq PHLX assesses a Floor Facility Fee of 
$330 per month for such purpose. See Securities Exchange Act Release 
No 69672 (June 5, 2013), 78 FR 33873 (May 30, 2013) (SR-PHLX-2013-
58). Nasdaq PHLX also assesses a variety of options trading floor 
fees including for equipment services and relocation requests. See 
Nasdaq PHLX Options 7 Pricing Schedule, Section 9. Other Member 
Fees, A. Option Trading Floor Fees. See also NYSE America Options 
Fees Schedule, Section IV, Monthly Floor Communication, 
Connectivity, Equipment and Booth or Podia Fees and NYSE Price List, 
Equipment Fees.
---------------------------------------------------------------------------

    The Exchange believes the proposed installation fee is also 
reasonable as the Exchange is passing through costs it incurs from a 
third party (i.e., the CBOT Building) with respect to the installation 
of such Lines. The Exchange believes this fee reasonably represents the

[[Page 62135]]

materials and labor costs of installation which, as discussed above, is 
assessed by a building that has experience in similar installations as 
it hosts many other participants in the financial industry, including 
trading firms and other exchanges' trading floors. The proposed fee 
also includes a redundant Line at no additional cost. The Exchange 
believes the proposed monthly and installation Line fees are equitable 
and not unfairly discriminatory as they will apply uniformly to all 
trading floor participants.
Co-Location and Meet-Me-Room
    The Exchange believes it is reasonable to cap all TPHs and non-TPHs 
to 8 ``U'' because the Exchange no longer owns the premises in which 
the Meet-me-Room resides and there is finite amount of space. The 
proposed cap however applies to all TPHs and non-TPHs uniformly. 
Additionally, the Exchange believes 8 ``U'' should be sufficient amount 
of space for any TPH or non-TPH and that with such cap in place there 
is sufficient space to accommodate all TPHs or non-TPHs who request co-
location service. The Exchange believes it's reasonable, equitable and 
not unfairly discriminatory to eliminate the Co-Location of Equipment 
Fee for Sponsored Users as it has not had any Sponsored Users in 
several years. If the Exchange were to approve a Sponsored User, such 
participant would merely be subject to the remaining (and lower) Co-
Location of Equipment Fee (i.e., $200 per 4 ``U''). The Exchange 
believes the proposed relocation and language updates to the current 
Co-Location fee are reasonable as the Exchange is not proposing to 
change the amount assessed but is merely updating and simplifying the 
Fees Schedule and making it easier to read.
    The Exchange believes the proposed $25 per cross-connect monthly 
fee is reasonable as it is a modest fee that is a pass-through of the 
fee the Exchange is assessed by a third-party (i.e., the CBOT Building) 
to maintain such cross connect. Additionally, the Exchange notes third-
party vendors such as telecommunication providers will no longer be 
subject to the $50 per month fee for ``Data Circuits from Local Carrier 
to Equipment Shelf''. Additionally, the Exchange believes the proposed 
amount is in line (and lower than) the amount assessed by another 
exchange for similar cross connects.\31\ The proposed cross connect 
installation fee is also reasonable as it is intended to recoup the 
fees incurred by the Exchange by third-party vendors for establishing 
the cross connects. The Exchange believes the installation fee assessed 
by the CBOT Building is also reasonable as it is in line with 
installation fees assessed by other data centers and exchanges for 
installation of cross-connections.\32\
---------------------------------------------------------------------------

    \31\ See Nasdaq PHLX Options 7 Pricing Schedule, Section 9. 
Other Member Fees, A. Option Trading Floor Fees, Cabinet-to-Cabinet 
Connectivity and Cabinet-to-Cabinet MPOE Connectivity, which are 
both subject to a $50 per month fee.
    \32\ See, e.g., NYSE American Options Fees Schedule, Section 
V(B).
---------------------------------------------------------------------------

    The Exchange believes the proposed Cboe Datacenter Services fee is 
reasonable as it recoups the costs the Exchange is assessed by the CBOT 
Building (as the owner of the building) when firms needs to access to 
the Meet-me-Room for purposes such as on-site support. The Exchange 
notes that it is aware that other data center facilities similarly 
require security escorts for Meet-me-Room access and assess fees for 
such access. Additionally, the Exchange waived the fee for the month of 
June 2022, so that visits to the Meet-me-Room to address any onboarding 
questions or issues that arose during the first month in the new 
facility were free of charge. Moreover, as noted above, the Exchange 
does not anticipate that access to the Meet-me-Room will be needed on a 
frequent basis.
    The Exchange believes the proposed cross connect and Cboe 
Datacenter Services fees are also equitable and not unfairly 
discriminatory as they will apply uniformly to all market participants 
that request these services, respectively.
Trading Floor Devices
    The Exchange believes the proposed changes related to the PAR fee 
are reasonable as the combined proposed fees for using PAR (i.e., 
Exchange Tablet fee and PAR Access fee) are only modestly higher than 
the fee TPHs are currently assessed for use of PAR. The Exchange notes 
that although TPHs that use PAR will be subject to a modestly higher 
fee, the PAR Workstation fee has remained unchanged for over eleven 
years, notwithstanding technology changes and improvements over the 
last decade, including for example, the ability to also access Silexx 
from the same tablet on which PAR is accessed.\33\ Moreover, the 
Exchange notes the proposed fee is still lower than fees assessed at 
other exchanges for trading floor terminals. For example, NYSE American 
assesses $450 per device per month for Floor Broker Handheld and an 
additional $215 per month per Exchange sponsored Floor Broker order 
entry system.\34\ Moreover, the Exchange notes that the Exchange 
provides technical support services for these tablets, eliminating the 
need for TPHs to purchase protection plans themselves for their device. 
The Exchange also incurs other costs associated with the tablets that 
it does not otherwise separately pass through, such as fees incurred 
for replacement of batteries and other parts. The Exchange will also 
replace a tablet at no additional cost if a tablet is damaged from 
normal wear and tear. Further, the Exchange replaces tablets at no 
additional cost approximately every 3 years. The Exchange believes the 
proposed Exchange Tablet fee is also reasonable as TPHs may, but do not 
have to, use an Exchange Tablet to access Cloud9. Indeed, they may use 
their own TPH-owned device for purposes of accessing Cloud9 and be 
subject to the alternative, and lower, TPH-Owned Device Authentication 
Fee.
---------------------------------------------------------------------------

    \33\ See Securities Exchange Act Release No. 63701 (January 11, 
2011), 76 FR 2934 (January 18, 2011) (SR-CBOE-2010-116).
    \34\ See also NYSE America Options Fees Schedule, Section IV, 
Monthly Floor Communication, Connectivity, Equipment and Booth or 
Podia Fees.
---------------------------------------------------------------------------

    The Exchange believes the proposed PAR Access fee is equitable and 
not unfairly discriminatory as it applies to all TPHs using PAR. 
Moreover, the proposed changes enable the Exchange to offer Exchange-
provided tablets for a separate monthly fee to TPHs that wish to use 
them for Cloud9, which is the Exchange's new telecommunications system 
that it will offer on the new trading floor. Currently, TPHs are 
subject to various communication fees including monthly fees, 
installation fees, relocation fees and removal fees which will no 
longer be assessed by the Exchange as the Exchange's current 
communications offerings will be rendered obsolete upon the transition 
to the new trading floor.\35\
---------------------------------------------------------------------------

    \35\ See Cboe Options Fee Schedule, Communications Fees.
---------------------------------------------------------------------------

    The Exchange believes the proposed TPH-Owned Device Authentication 
Fee is reasonable as the proposed fee is lower than the proposed fee 
assessed for Exchange Tablets which may alternatively be used if a TPH 
is looking to access Silexx or Cloud9. Additionally, the Exchange 
believes it's reasonable to assess TPHs a monthly fee for access to its 
network. Particularly, the Exchange expends resources to monitor and 
maintain the network, and importantly, ensure its secure and resilient. 
The Exchange also offers assistance during the onboarding process for 
the devices and expends resources monitoring and troubleshooting 
networking issues. The Exchange notes that as the number of

[[Page 62136]]

devices connected to the network increases, demand of Exchange time and 
resources may therefore also increase. As such, the Exchange also 
believes the proposed fee may encourage firms to be efficient with the 
number of devices it chooses to connect to the network. Moreover, the 
Exchange believes the new trading floor provides TPHs more flexibility 
to move and relocate any of their devices by eliminating the need for 
installation, relocation and removal of connectivity lines to devices 
and consequently, corresponding monthly, installation, relocation and 
removal fees. The proposed fee also applies to all TPHs accessing the 
Cboe floor Network from their own device.
Replacement Items
    The Exchange believes the proposed change to increase the tablet 
replacement fee is reasonable as the proposed amount better reflects 
the approximate cost to the Exchange to provide a replacement tablet to 
TPHs. Additionally, the Exchange believes adopting a $100 fee for 
replaced access badges is reasonable as the Exchange believes it will 
incentivize TPHs to keep track of their access badges and reduce the 
need for the Exchange to expend resources to print additional 
replacement badges. The Exchange believes these changes are also 
reasonable, equitable and not unfairly discriminatory because TPHs that 
lose these items or damage these items from non-normal wear or tear 
should be responsible for the cost of replacement. The Exchange 
believes the proposed fees will encourage TPHs to take proper care and 
track of these items. Additionally, the Exchange notes that it will not 
charge TPHs to replace defective items (that were not the result of 
non-normal wear and tear).
Obsolete Fees
    The Exchange believes eliminating the facility fees discussed above 
is reasonable as such corresponding services and architecture will be 
rendered obsolete upon transitioning to the new trading floor. 
Additionally, the Exchange believes the proposed new fee structure as 
compared to the fees being eliminated provides for a more streamlined 
and simplified approach to facility fees. The Exchange believes the 
proposed elimination of these fees is equitable and not unfairly 
discriminatory as it will apply uniformly to all TPHs. The proposal to 
eliminate references to these fees in Footnote 12, 24 and 50 also 
maintains clarity in the Fees Schedule and avoids potential confusion.
Footnote 24
    As discussed above, as of June 6, 2022, the Exchange no longer 
operates in a modified state due to the COVID-19 pandemic as the 
Exchange no longer maintains a modified configuration of trading crowds 
to implement social distancing nor does it reduce or limit how many 
floor participants may access the trading floor. Accordingly, because 
the Exchange is not considered to be operating in a modified 
configuration as of June 6, 2022, Footnote 24 is no longer applicable 
and the modified billing practices will revert back to original 
billing.
    In sum and in addition to all the reasons discussed above, the 
Exchange believes its proposed fees are reasonable in light of the 
numerous benefits the new trading floor provides its floor 
participants. The Exchange believes the new trading floor provides for 
state-of-the-art infrastructure, enhanced technology capabilities, and 
a flexible, open and dynamic environment to facilitate more seamless 
and efficient interaction between traders. The Exchange also notes that 
it considered a number of factors in determining the location of the 
new trading floor including cost to the Exchange and its TPHs, as well 
as the convenience of location for the trading floor community and 
Exchange staff. Another critical consideration was whether the new 
building would have the necessary infrastructure and ability to support 
a sophisticated and state-of-the art trading floor. As the CBOT 
Building already hosts several trading firms and two other exchange 
trading floors, the Exchange felt confident the CBOT Building would be 
able to accommodate the Exchange's technology and infrastructure needs 
for its floor. The Exchange therefore believes the amounts of the fees 
assessed by the CBOT Building that it proposes to pass-through are 
reasonable. The proposed fees are also in line with fees assessed by 
other data centers and exchanges for similar technology and services. 
For example, as noted above, the $25 cross connect fee is lower than 
the fees assessed by other exchanges for similar cross connections.
    The Exchange also notes that is has not sought to pass through 
other costs incurred in connection with the new trading floor, 
including design, construction and other on-going maintenance costs. 
Moreover, the Exchange has not modified many of its facilities fees in 
several years. The Exchange therefore believes the proposed fees are 
reasonable because they allow the Exchange to recoup fees associated 
with the costs of operating a modern and cutting-edge trading floor and 
offset and keep pace with increasing technology costs.

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 Exchange does not 
believe that the proposed rule changes will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the proposed changes 
would be applied in the same manner to all similarly situated 
participants and as such, would not impose a disparate burden on 
competition among the same classes of market participants. As described 
in further detail above, the proposed fees are also applicable only to 
market participants that choose to avail themselves to the 
corresponding facility services. For example, only firms that choose to 
rent Booths (which are optional and not required for open-outcry 
trading) will be subject to the proposed Booth Fees. Similarly, only 
firms that choose to purchase Exchange-provided tablets are subject to 
the tablet fee, and firms may otherwise choose to purchase and provide 
their own tablets.
    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed rule changes apply only to fees relating to the Exchange's 
floor facility. Further, as described in detail above, the Exchange 
believes its proposed facilities fees are in line with facility fees 
assessed at other exchanges that maintain physical trading floors. 
Additionally, the Exchange notes it operates in a highly competitive 
market. In addition to Cboe Options, TPHs have numerous alternative 
venues that they may participate on and director their order flow, 
including 15 other options exchanges (four of which also maintain 
physical trading floors), as well as off-exchange venues, where 
competitive products are available for trading. Based on publicly 
available information, no single options exchange has more than 18% of 
the market share of executed volume of options trades.\36\ Therefore, 
no exchange possesses significant

[[Page 62137]]

pricing power in the execution of option order flow. 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.'' \37\ 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'. . . .''.\38\ Accordingly, the Exchange 
does not believe its proposed changes to the incentive programs impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \36\ See Cboe Global Markets, U.S. Options Market Volume Summary 
by Month (September 26, 2022), available at http://markets.cboe.com/us/options/market_share/.
    \37\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \38\ 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)).
---------------------------------------------------------------------------

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 is effective upon filing pursuant to 
Section 19(b)(3)(A) \39\ of the Act and subparagraph (f)(2) of Rule 
19b-4 \40\ thereunder, because it establishes a due, fee, or other 
charge imposed by the Exchange.
---------------------------------------------------------------------------

    \39\ 15 U.S.C. 78s(b)(3)(A).
    \40\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 shall institute proceedings under 
Section 19(b)(2)(B) \41\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
---------------------------------------------------------------------------

    \41\ 15 U.S.C. 78s(b)(2)(B).
---------------------------------------------------------------------------

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-CBOE-2022-049 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-CBOE-2022-049. 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-CBOE-2022-049, and should be submitted 
on or before November 3, 2022.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\42\
---------------------------------------------------------------------------

    \42\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------


J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 2022-22180 Filed 10-12-22; 8:45 am]
BILLING CODE 8011-01-P