[Federal Register Volume 89, Number 135 (Monday, July 15, 2024)]
[Notices]
[Pages 57460-57463]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-15408]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-100477; File No. SR-CboeBZX-2024-061]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Modify 
the Company Listing Fees Under Exchange Rule 14.13

July 9, 2024.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (``Act'') and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on June 26, 2024, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') 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 Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to modify the Company Listing Fees under 
Exchange Rule 14.13.

[[Page 57461]]

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://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 a clean-up change to Rule 14.13(b) to correct 
a drafting error from a previous amendment to the Company Listings Fees 
that delineated the Application Fee from the Entry Fee in the 
Exchange's rulebook.\3\ As a result, a particular exception to the 
Application Fee and Entry Fee was no longer applicable to both fee 
types, and other exceptions to the Application Fee and Entry Fee were 
unclearly listed under only one fee type in the Exchange's Rules. Now, 
the Exchange proposes to amend its rules to provide that both the 
Application Fee and Entry Fee are part of the ``Initial Listing Fees'', 
and to make structural changes to existing Rule 14.13 to clearly 
provide any exceptions are applicable to the Initial Listing Fees.\4\
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    \3\ See Securities Exchange Act No. 98991 (November 20, 2023) 88 
FR 82933 (November 27, 2023) (SR-CboeBZX-2023-092) (Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Delineate 
the Application Fee From the Entry Fee, To Increase the Application 
Fee for Tier I and Tier II Securities Listed on the Exchange in 
Certain Circumstances, To Change the Assessment Date of the Entry 
Fee, and To Clarify That Both the Entry Fee and Application Fee Are 
Non-Refundable as Provided in Exchange Rule 14.13) (the ``Previous 
Amendment'').
    \4\ The Exchange initially filed this proposed rule change on 
June 7, 2024 (SR-CboeBZX-2024-053). On June 17, 2024, the Exchange 
withdrew that filing and submitted SR-CboeBZX-2024-059. On June 26, 
2024, the Exchange withdrew that filing and submitted this filing.
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    The Exchange proposes to adopt Rule 14.13(b)(1), which would be 
titled ``Initial Listing Fees''. Thereunder, proposed Rules 
14.13(b)(1)(A) and (B) would provide for the Application Fee and Entry 
Fee, respectively, which are currently provided under Rule 14.13(b)(1) 
and (2). The Exchange proposes no substantive change to the Application 
Fees provided under proposed Rule 14.13(b)(1)(A)(i)-(iii), except to 
update cross references to Rule 14.13 in proposed Rule 
14.13(b)(1)(A)(iii). Similarly, the Exchange proposes to re-letter 
Rules 14.13(b)(2)(A) through (E) to Rules 14.13(b)(1)(B)(i) through 
(v), including any corresponding re-numbering or re-lettering to 
subparagraphs thereunder. The Exchange proposes no substantive change 
to proposed Rules 14.13(b)(1)(B)(i) through (v) except to update cross-
references to Rule 14.13 in Rule 14.13(b)(1)(B)(iii).
    Next, the Exchange proposes to delete existing Rule 14.13(b)(2)(G) 
which is currently reserved and contains no substantive text. The 
Exchange also proposes to re-letter existing Rules 14.13(b)(2)(F), (H), 
and (I) to proposed Rules 14.13(b)(1)(C), (D), and (E), respectively. 
By re-lettering these paragraphs, they will fall under the Initial 
Listing Fees section of the Rule and the Exchange believes such change 
will more clearly provide that those Rules are applicable to all 
Initial Listing Fees, regardless of whether they are an Application Fee 
or Entry Fee.
    Prior to the Previous Amendment, the Application Fee was a subset 
of the Entry Fee but the Previous Amendment created a delineation 
between the Application Fee and Entry Fee in order to make the Rule 
easier to read. The proposal, however, did not make a corresponding 
amendment to Rule 14.13(b)(2)(F) to provide that the Exchange Board 
(the ``Board'') or its designee may defer or waive any part of the 
Application Fee and/or Entry Fee. Now, the Exchange proposes to correct 
that oversight by updating proposed Rule 14.13(b)(1)(C) to provide that 
such discretion applies to the Initial Listing Fees, which includes 
both the Application Fee and Entry Fee.
    The Exchange is also proposing to delete cross-references to Rule 
14.13(b)(2) from proposed Rules 14.13(b)(2)(D) and (E). While the 
Exchange updated proposed Rules 14.13(b)(1)(D) and (E) in the Previous 
Amendment to apply to both the Application Fee and Entry Fee, those 
provisions were provided for only under the Entry Fee portion of the 
Rule, which the Exchange believes may be unclear or cause confusion. 
Accordingly, the Exchange believes that the proposed re-lettering of 
those rules will clearly provide that the exceptions apply to the 
Initial Listing Fees (which include both the Application Fee and Entry 
Fee).
    In light of the structural changes proposed above, the Exchange 
proposes to re-number existing Rules 14.13(b)(3) and (4) to Rules 
14.13(b)(2) and (3). The Exchange also proposes to update cross-
references to Rule 14.13 in proposed Rules 14.13(b)(2)(C), (H), (I), 
and (K).
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act the rules and regulations thereunder applicable to the Exchange 
and, in particular, the requirements of Section 6(b) of the Act.\5\ 
Specifically, the Exchange believes the proposed rule change is 
consistent with the Section 6(b)(5) \6\ 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) \7\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers as well as Section 6(b)(4) \8\ 
as it is designed to provide for the equitable allocation of reasonable 
dues, fees and other charges among its Members and other persons using 
its facilities.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
    \7\ Id.
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange first notes that its corporate listing business 
operates in a highly-competitive market in which Companies can readily 
list on another national securities exchange if they deem fee levels or 
any other factor at a particular venue to be insufficient or excessive. 
Exchange Rule 14.13 reflects a competitive pricing structure designed 
to incentivize Companies to list new securities, which the Exchange 
believes will enhance competition both among Companies and listing 
venues, to the benefit of investors.
    The Exchange believes that the proposed changes will add clarity to 
the Exchange's rulebook, to the benefit of all

[[Page 57462]]

investors. As proposed, both the Application Fee and Entry Fee will be 
considered part of the Initial Listings Fee. Further, any exceptions to 
such Initial Listings Fees will be clearly set forth thereunder. The 
Exchange also believes that the deletion of an unused Rule provision 
(i.e., Rule 14.13(b)(2)(G)) and updates to any cross-references within 
Rule 14.13 based on the proposed changes will provide for a clear and 
consistent rulebook, which will benefit all investors.
    The Exchange believes it is reasonable to allow the Board of 
Directors or its designee, in its discretion, to defer or waive all or 
any part of the Initial Listing Fees described in proposed Rule 
14.13(b)(1). Prior to the Previous Amendment, the Application Fee was a 
subset of the Entry Fee but the Previous Amendment created a 
delineation between the Application Fee and Entry Fee in order to make 
the Rule easier to read, but the proposal did not make a corresponding 
amendment to Rule 14.13(b)(2)(F) to provide that the Board or its 
designee may defer or waive any part of the Application Fee and/or 
Entry Fee. The Exchange's proposal would correct that drafting error by 
updating proposed Rule 14.13(b)(1)(C) to provide that such discretion 
applies to the Initial Listing Fees, which includes both the 
Application Fee and Entry Fee. The Exchange notes that another 
exchange's rules have long provided similar authority to its board of 
directors or its designee to defer or waive all or any part of the 
entry fee, which includes the application fee. Specifically, the Nasdaq 
Stock Market LLC (``Nasdaq'') rules provide that the application fee 
falls under the entry fees of its rulebook,\9\ in a similar fashion to 
Exchange Rules prior to the Previous Amendment. Nasdaq Rules also 
provide that its board of directors or its designee may, in its 
discretion defer or waive all or any part of the entry fee prescribed 
in its company listing fees rules.
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    \9\ See Nasdaq Rule 5920(a)(2).
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    Given the foregoing, the Exchange believes the proposed fee 
amendments are consistent with the Act.

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 market for listing 
services is extremely competitive and listed companies may freely 
choose alternative venues based on the aggregate fees assessed, and the 
value provided by each listing.
    The proposed change is a clean-up change to Rule 14.13(b)(2)(F) to 
correct a drafting error from a previous amendment to the Company 
Listings Fees that delineated the Application Fee from the Entry Fee in 
the Exchange's rulebook. As a result, a particular exception to the 
Application Fee and Entry Fee was no longer applicable to both fee 
types, and other exceptions to the Application Fee and Entry Fee were 
unclearly listed under only one fee type under the Rule. The proposed 
amendments would provide that both the Application Fee and Entry Fee 
are part of the ``Initial Listing Fees'' and would make structural 
changes to existing Rule 14.13 to clearly provide any exceptions 
applicable to the Initial Listing Fees. As the proposed amendments are 
designed to add clarity to the Exchange's rulebook and to correct a 
drafting error, the Exchange does not believe the proposal will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.
    The Exchange believes that the proposed amendment does not encumber 
competition for listings with other listing venues, which are similarly 
free to set their fees. Rather, it reflects competition among listing 
venues and will further enhance competition.

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 \10\ and paragraph (f) of Rule 19b-4 \11\ 
thereunder. At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeBZX-2024-061 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-2024-061. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2024-061 and should 
be submitted on or before August 5, 2024.


[[Page 57463]]


    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2024-15408 Filed 7-12-24; 8:45 am]
BILLING CODE 8011-01-P