[Federal Register Volume 90, Number 240 (Wednesday, December 17, 2025)]
[Notices]
[Pages 58659-58664]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-23069]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104379; File No. SR-CboeBYX-2025-034]
Self-Regulatory Organizations; Cboe BYX Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend
the Exchange's Fee Schedule by Amending Certain Add/Remove Volume
Tiers, Amending the Non-Displayed Tier, and Removing the Routing Tier
December 12, 2025.
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 December 1, 2025, Cboe BYX Exchange, Inc. (the``Exchange'' or
``BYX'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BYX Exchange, Inc. (the ``Exchange'' or ``BYX'') proposes to
amend its Fee Schedule by amending certain Add/Remove Volume Tiers,
amending the Non-Displayed Tier, and removing the Routing Tier. The
text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the
Commission's website (https://www.sec.gov/rules/sro.shtml), the
Exchange's website (https://www.cboe.com/us/equities/regulation/rule_filings/bzx/), and at the principal office of the Exchange.
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
[[Page 58660]]
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 Fee Schedule applicable to its
equities trading platform (``BYX Equities'') by: (i) revising the
volume component of Add/Remove Volume Tiers 1-2; (ii) removing the
shares component of Add/Remove Volume Tiers 1-2 and replacing it with a
component that excludes a Member's subdollar trading activity; (iii)
adding a criteria that excludes a Member's subdollar trading activity
to Add/Remove Volume Tiers 3-5; (iv) removing the shares component of
the Non-Displayed Tier and replacing it with a TCV component; (v) and
adding a criteria that excludes a Member's subdollar trading activity
to the Non-Displayed Tier; and (vi) removing the Routing Tier. The
Exchange proposes to implement these changes effective December 1,
2025.
The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 17 registered equities exchanges, as well as a
number of alternative trading systems and other off-exchange venues
that do not have similar self-regulatory responsibilities under the
Securities Exchange Act of 1934 (the ``Act''), to which market
participants may direct their order flow. Based on publicly available
information,\3\ no single registered equities exchange has more than
15% of the market share. Thus, in such a low-concentrated and highly
competitive market, no single equities exchange possesses significant
pricing power in the execution of order flow. The Exchange in
particular operates a ``Taker-Maker'' model whereby it pays credits to
members that remove liquidity and assesses fees to those that add
liquidity. The Exchange's Fee Schedule sets forth the standard rebates
and rates applied per share for orders that remove and provide
liquidity, respectively. Currently, for orders in securities priced at
or above $1.00, the Exchange provides a standard rebate of $0.00200 per
share for orders that remove liquidity and assesses a fee of $0.00200
per share for orders that add liquidity.\4\ For orders in securities
priced below $1.00, the Exchange does not assess any fees for orders
that add liquidity, and provides a rebate in the amount of 0.10% of the
total dollar value for orders that remove liquidity.\5\ Additionally,
in response to the competitive environment, the Exchange also offers
tiered pricing which provides Members opportunities to qualify for
higher rebates or reduced fees where certain volume criteria and
thresholds are met. Tiered pricing provides an incremental incentive
for Members to strive for higher tier levels, which provides
increasingly higher benefits or discounts for satisfying increasingly
more stringent criteria.
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\3\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (November 21, 2025), available at https://www.cboe.com/us/equities/market_statistics/.
\4\ See BYX Equities Fee Schedule, Standard Rates.
\5\ Id.
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Add/Remove Volume Tiers and Non-Displayed Tier
Under footnote 1 of the Fee Schedule, the Exchange currently offers
various Add/Remove Volume Tiers. In particular, the Exchange offers
five Add/Remove Volume Tiers that each provide a reduced fee for
Members' qualifying orders yielding fee codes B,\6\ V,\7\ Y,\8\ and AD
\9\ where a Member reaches certain volume-based criteria. First, the
Exchange proposes to (i) revise the volume component of Add/Remove
Volume Tiers 1-2 and (ii) remove the shares component of Add/Remove
Volume Tiers 1-2 and replace it with a component that excludes a
Member's subdollar trading activity. The criteria for current Add/
Remove Volume Tiers 1-2 is as follows:
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\6\ Fee code B is appended to displayed orders that add
liquidity to BYX in Tape B securities.
\7\ Fee code V is appended to displayed orders that add
liquidity to BYX in Tape A securities.
\8\ Fee code Y is appended to displayed orders that add
liquidity to BYX in Tape C securities.
\9\ Fee code AD is appended to displayed orders executed in a
Periodic Auction.
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Add/Remove Volume Tier 1 assesses a reduced fee of $0.0016
per share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes B, V, Y, or AD) where (1) Member has a
combined Auction ADV \10\ and ADAV \11\ >= 0.10% of the TCV \12\ or (2)
Member has a combined Auction ADV and ADAV >= 11,000,000 shares.
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\10\ ``Auction ADV'' means average daily auction volume
calculated as the number of shares executed in an auction per day.
\11\ ``ADAV'' means average daily added volume calculated as the
number of shares added per day. ADAV is calculated on a monthly
basis.
\12\ ``TCV'' means total consolidated volume calculated as the
volume reported by all exchanges and trade reporting facilities to a
consolidated transaction reporting plan for the month for which the
fees apply.
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Add/Remove Volume Tier 2 assesses a reduced fee of $0.0014
per share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes B, V, Y, or AD) where (1) Member has a
combined Auction ADV and ADAV >= 0.15% of the TCV or (2) Member has a
combined Auction ADV and ADAV >= 16,000,000 shares.
The proposed criteria for current Add/Remove Volume Tiers 1-2 is as
follows:
Proposed Add/Remove Volume Tier 1 assesses a reduced fee
of $0.0016 per share in securities priced at or above $1.00 to
qualifying orders (i.e., orders yielding fee codes B, V, Y, or AD)
where (1) Member has a combined Auction ADV and ADAV >= 0.075% of the
TCV or (2) Member has a combined Ex-Subdollar Auction ADV \13\ and Ex-
Subdollar ADAV \14\ as a percentage of Ex-Subdollar TCV >= 0.075%.\15\
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\13\ The Exchange proposes to introduce the term ``Ex-Subdollar
Auction ADV'' to the Definitions section of the Fee Schedule. ``Ex-
Subdollar Auction ADV'' means Auction ADV that excludes executions
in securities priced below $1.00.
\14\ The Exchange proposes to introduce the term ``Ex-Subdollar
ADAV'' to the Definitions section of the Fee Schedule. ``Ex-
Subdollar ADAV'' means ADAV that excludes executions in securities
priced below $1.00.
\15\ The Exchange proposes to introduce the term ``Ex-Subdollar
TCV'' to the Definitions section of the Fee Schedule. ``Ex-Subdollar
TCV'' means TCV that excludes executions in securities that have an
average daily price below $1.00.
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Proposed Add/Remove Volume Tier 1 assesses a reduced fee
of $0.0016 per share in securities priced at or above $1.00 to
qualifying orders (i.e., orders yielding fee codes B, V, Y, or AD)
where (1) Member has a combined Auction ADV and ADAV >= 0.10% of the
TCV or (2) Member has a combined Ex-Subdollar Auction ADV and Ex-
Subdollar ADAV as a percentage of Ex-Subdollar TCV >= 0.10%.
In addition, the Exchange proposes to introduce a second criteria
that excludes a Member's subdollar trading activity to Add/Remove
Volume Tiers 3-5. The criteria for current Add/Remove Volume Tiers 3-5
is as follows:
Add/Remove Volume Tier 3 assesses a reduced fee of $0.0013
per
[[Page 58661]]
share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes B, V, Y, or AD) where Member has a
combined Auction ADV and ADAV >= 0.30% of the TCV.
Add/Remove Volume Tier 4 assesses a reduced fee of $0.0012
per share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes B, V, Y, or AD) where Member has a
combined Auction ADV and ADAV >= 0.60% of the TCV.
Add/Remove Volume Tier 5 assesses a reduced fee of $0.0012
per share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes B, V, Y, or AD) where MPID has a
combined Auction ADV and ADAV >= 0.55% of the TCV.
The proposed criteria for Add/Remove Volume Tiers 3-5 is as
follows:
Proposed Add/Remove Volume Tier 3 assesses a reduced fee
of $0.0013 per share in securities priced at or above $1.00 to
qualifying orders (i.e., orders yielding fee codes B, V, Y, or AD)
where (1) Member has a combined Auction ADV and ADAV >= 0.30% of the
TCV or (2) Member has a combined Ex-Subdollar Auction ADV and Ex-
Subdollar ADAV as a percentage of Ex-Subdollar TCV >= 0.30%.
Proposed Add/Remove Volume Tier 4 assesses a reduced fee
of $0.0012 per share in securities priced at or above $1.00 to
qualifying orders (i.e., orders yielding fee codes B, V, Y, or AD)
where Member has a combined Auction ADV and ADAV >= 0.60% of the TCV or
(2) Member has a combined Ex-Subdollar Auction ADV and Ex-Subdollar
ADAV as a percentage of Ex-Subdollar TCV >= 0.60%.
Proposed Add/Remove Volume Tier 5 assesses a reduced fee
of $0.0012 per share in securities priced at or above $1.00 to
qualifying orders (i.e., orders yielding fee codes B, V, Y, or AD)
where MPID has a combined Auction ADV and ADAV >= 0.55% of the TCV or
(2) MPID has a combined Ex-Subdollar Auction ADV and Ex-Subdollar ADAV
as a percentage of Ex-Subdollar TCV >= 0.55%.
Additionally, under footnote 1 of the Fee Schedule, the Exchange
offers a Non-Displayed Tier that provides a reduced fee for Members'
qualifying orders yielding fee codes AH \16\ and MM \17\ where a Member
reaches certain volume-based criteria. First, the Exchange proposes to
remove the shares component of the Non-Displayed Tier and replace it
with a TCV component. In addition, the Exchange proposes to add a
second prong of criteria that excludes a Member's subdollar trading
activity to the Non-Displayed Tier. The criteria for the current Non-
Displayed Tier is as follows:
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\16\ Fee code AH is appended to non-displayed orders executed in
a Periodic Auction.
\17\ Fee code MM is appended to non-displayed orders that add
liquidity to BYX using Mid-Point Peg.
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The Non-Displayed Tier assesses a reduced fee of $0.0005
per share in securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes B, V, Y, or AD) where Member has a
combined Auction ADV and ADAV >= 5,000,000.
The proposed criteria for the Non-Displayed Tier is as follows:
The proposed Non-Displayed Tier assesses a reduced fee of
$0.0005 per share in securities priced at or above $1.00 to qualifying
orders (i.e., orders yielding fee codes B, V, Y, or AD) where (1)
Member has a combined Auction ADV and ADAV >= 0.03% of the TCV or (2)
Member has a combined Ex-Subdollar Auction ADV and Ex-Subdollar ADAV as
a percentage of Ex-Subdollar TCV >= 0.03%.
The proposed modification to the volume component of the first
prong of criteria of Add/Remove Volume Tiers 1-2 represents a modest
decrease in difficulty of one prong of criteria to achieve the
applicable tier threshold while maintaining the existing fee.
Additionally, the proposed modification to the volume component of the
first prong of criteria of the Non-Displayed Tier seeks to align the
criteria of the Non-Displayed Tier with the first prong of criteria
applicable to the Add/Remove Volume Tiers while maintaining the
existing fee. In each instance, the revised first prong of criteria is
designed to match the percentage requirement in the proposed second
prong of criteria and is commensurate with the reduced fee assessed if
the criteria is satisfied.
While Auction ADV or ADAV as a percentage of TCV is generally a
reasonable baseline for determining tiered pricing for Members, the
Exchange notes that in certain months where subdollar trading volume is
significantly higher, TCV becomes inflated due to the higher levels of
subdollar volume. During these months of high subdollar trading volume,
if a Member does not increase its volume to account for the increased
TCV, then the Member is disadvantaged when it comes to satisfying
criteria requiring Auction ADV or ADAV as a percentage of TCV. The
Exchange's proposed introduction of the Ex-Subdollar ADV and ADAV as a
percentage of Ex-Subdollar TCV prong of criteria (the ``Ex-Subdollar
Criteria'') in Add Volume Tiers 1-3 and Add Volume Tiers 5-7 is
designed to provide Members with an opportunity to earn an enhanced
rebate during months when subdollar trading activity is high and the
Exchange's calculation of ADAV inclusive of subdollar volume under the
Tiers' existing criteria could potentially make it far more difficult
for the Member to qualify, particularly when the Member's volume in
securities priced at or above $1.00 remains relatively constant. The
Exchange notes that its proposed Ex-Subdollar Criteria in Add Volume
Tiers 1-3 and Add Volume Tiers 5-7 will introduce a new method of
calculating ADAV as a percentage of TCV, exclusive of subdollar
activity.\18\
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\18\ The Exchange notes that its affiliate exchange, Cboe BZX
Exchange, Inc. (``BZX'') offers the same method of calculating total
equity volume and TCV for certain tiers in order to determine the
appropriate fees and rebates for its Members. See BZX Equities Fee
Schedule, Footnote 1, Add/Remove Volume Tiers. See also Securities
Exchange Act Release No. 34-103500 (July 18, 2025), 90 FR 34705
(July 23, 2025), SR-CboeBZX-2025-091 (``BZX Fee Filing''). NYSE Arca
offers a similar method of calculating total equity volume and total
equity CADV for certain tiers in order to determine the appropriate
fees and credits for its ETP Holders. See NYSE Arca Equities Fee and
Charges, NYSE Arca Marketplace: Trade Related Fees and Credits,
Footnote 1. See also Securities Exchange Act Release No. 34-100506
(July 11, 2024), 89 FR 58215 (July 17, 2024), SR-NYSEArca-2024-58
(``NYSE Arca Fee Filing'').
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This change is intended to aid Members during months where
subdollar volume is elevated, thus causing the TCV (used as the
denominator when the Exchange calculates this prong of criteria) to be
significantly higher while the Member's ADAV (used as the numerator for
the Exchange's calculation of this prong of criteria) remains
relatively stable if they are not actively trading in securities priced
below $1.00. In months when subdollar trading activity is particularly
high, the Exchange believes that it would be unfair to Members that
execute significant volume in securities priced at or above $1.00 to
potentially not be able to qualify for an enhanced rebate or lose
existing incentives due to an increase in TCV due to a significant
increase in the amount of volume in securities priced below $1.00. The
Exchange believes that the proposed criteria continues to be
commensurate with the rebate received for each tier and will encourage
Members to grow their volume on the Exchange. Increased volume on the
Exchange contributes to a deeper and more liquid market, which benefits
all market participants and provides greater execution opportunities on
the Exchange.
Routing Tier
Under footnote 3 of the Fee Schedule, the Exchange currently offers
a Routing
[[Page 58662]]
Tier that provides an enhanced rebate for Members' qualifying orders
yielding fee code C \19\ where certain volume-based criteria is met.
The Exchange now proposes to delete the Routing Tier as the Exchange
does not wish to, nor is required to, maintain such tier. More
specifically, the proposed change removes this tier as the Exchange
would rather redirect future resources and funding into other programs
and tiers intended to incentivize increased order flow.
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\19\ Fee code C is appended to orders routed to NASDAQ BX using
Destination Specific, TRIM or SLIM routing strategy.
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) of the
Act.\20\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \21\ 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) \22\ 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) \23\
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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\20\ 15 U.S.C. 78f(b).
\21\ 15 U.S.C. 78f(b)(5).
\22\ Id.
\23\ 15 U.S.C. 78f(b)(4)
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As described above, the Exchange operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. The Exchange believes that
its proposed changes to the Add/Volume Tiers and Non-Displayed Tier
reflects a competitive pricing structure designed to incentivize market
participants to direct their order flow to the Exchange, which the
Exchange believes would enhance market quality to the benefit of all
Members. Additionally, the Exchange notes that relative volume-based
incentives and discounts have been widely adopted by exchanges,\24\
including the Exchange,\25\ and are reasonable, equitable and non-
discriminatory because they are open to all Members on an equal basis
and provide additional benefits or discounts that are reasonably
related to (i) the value to an exchange's market quality and (ii)
associated higher levels of market activity, such as higher levels of
liquidity provision and/or growth patterns. Competing equity exchanges
offer similar tiered pricing structures, including schedules or rebates
and fees that apply based upon members achieving certain volume and/or
growth thresholds, as well as assess similar fees or rebates for
similar types of orders, to that of the Exchange.
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\24\ See e.g., BZX Equities Fee Schedule, Footnote 1, Add/Remove
Volume Tiers.
\25\ See e.g., BYX Equities Fee Schedule, Footnote 1, Add/Remove
Volume Tiers.
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In particular, the Exchange believes its proposal to modify the
Add/Remove Volume Tiers and Non-Displayed Tier is reasonable because
the tiers will be available to all Members and provide all Members with
an opportunity to receive a reduced fee should certain criteria be met.
The Exchange further believes that the revised Add/Remove Volume Tiers
and the revised Non-Displayed Tier will provide a reasonable means to
encourage adding displayed and non-displayed orders in Members' order
flow to the Exchange and to incentivize Members to continue to provide
volume to the Exchange by offering them an additional opportunity to
receive a reduced fee on qualifying orders. An overall increase in
activity would deepen the Exchange's liquidity pool, offer additional
cost savings, support the quality of price discovery, promote market
transparency and improve market quality, for all investors.
The Exchange believes proposed modified Add/Remove Volume Tiers and
modified Non-Displayed Tier are reasonable as they do not represent a
significant departure from the criteria currently offered in the Fee
Schedule. The Exchange also believes that the proposal represents an
equitable allocation of fees and rebates and is not unfairly
discriminatory because all Members will be eligible for the revised
tiers and have the opportunity to meet the tiers' criteria and receive
the corresponding reduced fee if such criteria are met. Without having
a view of activity on other markets and off-exchange venues, the
Exchange has no way of knowing whether these proposed rule changes
would definitely result in any Members qualifying for the new proposed
tiers. While the Exchange has no way of predicting with certainty how
the proposed changes will impact Member activity, based on the prior
months volume, the Exchange anticipates that at least three Members
will be able to satisfy proposed Add/Remove Volume Tier 1, no Members
will be able to satisfy proposed Add/Remove Volume Tier 2, no Members
will be able to satisfy proposed Add/Remove Volume Tier 3, no Members
will be able to satisfy proposed Add/Remove Volume Tier 4, no Members
will be able to satisfy proposed Add/Remove Volume Tier 5, and at least
nine Members will be able to satisfy the proposed Non-Displayed Tier.
The Exchange also notes that the proposed changes will not adversely
impact any Member's ability to qualify for reduced fees or enhanced
rebates offered under other tiers. Should a Member not meet the
proposed new criteria, the Member will merely not receive that
corresponding reduced fee.
The Exchange believes that its proposal to eliminate the Routing
Tier is reasonable because the Exchange is not required to maintain
this tier nor is it required to provide Members an opportunity to
receive enhanced rebates. The Exchange believes its proposal to
eliminate this tier is also equitable and not unfairly discriminatory
because it applies to all Members (i.e., the tier will not be available
for any Member). The Exchange also notes that the proposed rule change
to remove this tier merely results in Members not receiving an enhanced
rebate, which, as noted above, the Exchange is not required to offer or
maintain. Furthermore, the proposed rule change to eliminate the tier
enables the Exchange to redirect resources and funding into other
programs and tiers intended to incentivize increased order flow.
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. Rather, as discussed above,
the Exchange believes that the proposed change would encourage the
submission of additional order flow to a public exchange, thereby
promoting market depth, execution incentives and enhanced execution
opportunities, as well as price discovery and transparency for all
Members. As a result, the Exchange believes that the
[[Page 58663]]
proposed changes further the Commission's goal in adopting Regulation
NMS of fostering competition among orders, which promotes ``more
efficient pricing of individual stocks for all types of orders, large
and small.''
The Exchange believes the proposed rule changes do not impose any
burden on intramarket competition that is not necessary or appropriate
in furtherance of the purposes of the Act. Particularly, the proposed
modified Add/Remove Volume Tiers and modified Non-Displayed Tier will
apply to all Members equally in that all Members are eligible for the
tiers and reduced fees, have a reasonable opportunity to meet the
proposed tiers' criteria and will receive the reduced fee on their
qualifying orders if such criteria is met. The Exchange does not
believe the proposed changes burden competition, but rather, enhance
competition as they are intended to increase the competitiveness of BYX
by amending existing pricing incentives in order to attract order flow
and incentivize participants to increase their participation on the
Exchange, providing for additional execution opportunities for market
participants and improved price transparency. Greater overall order
flow, trading opportunities, and pricing transparency benefits all
market participants on the Exchange by enhancing market quality and
continuing to encourage Members to send orders, thereby contributing
towards a robust and well-balanced market ecosystem.
Additionally, the Exchange believes the proposed elimination of the
current Routing Tier does not impose any burden on intramarket
competition that is not necessary or appropriate in furtherance of the
purposes of the Act. Specifically, the proposed change to eliminate the
current Routing Tier will not impose any burden on intramarket
competition because the changes apply to all Members uniformly, as in,
the tier will no longer be available to any Member.
Next, the Exchange believes the proposed rule changes does not
impose any burden on intermarket competition that is not necessary or
appropriate in furtherance of the purposes of the Act. As previously
discussed, the Exchange operates in a highly competitive market.
Members have numerous alternative venues that they may participate on
and direct their order flow, including other equities exchanges, off-
exchange venues, and alternative trading systems. Additionally, the
Exchange represents a small percentage of the overall market. Based on
publicly available information, no single equities exchange has more
than 15% of the market share.\26\ Therefore, no exchange possesses
significant pricing power in the execution of order flow. Indeed,
participants can readily choose to send their orders to other exchange
and off-exchange venues if they deem fee levels at those other venues
to be more favorable. Moreover, the Commission has repeatedly expressed
its preference for competition over regulatory intervention in
determining prices, products, and services in the securities markets.
Specifically, in Regulation NMS, the Commission highlighted the
importance of market forces in determining prices and SRO revenues and,
also, recognized that current regulation of the market system ``has
been remarkably successful in promoting market competition in its
broader forms that are most important to investors and listed
companies.'' \27\ 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'. . . .''.\28\ Accordingly, the Exchange does not believe its
proposed fee change imposes any burden on competition that is not
necessary or appropriate in furtherance of the purposes of the Act.
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\26\ Supra note 3.
\27\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
\28\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010)
(quoting Securities Exchange Act Release No. 59039 (December 2,
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
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C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received from Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \29\ and paragraph (f) of Rule 19b-4 \30\
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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\29\ 15 U.S.C. 78s(b)(3)(A).
\30\ 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-CboeBYX-2025-034 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-CboeBYX-2025-034. 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 filing 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-CboeBYX-2025-034 and should be submitted
on or before January 7, 2026.
[[Page 58664]]
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\31\
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\31\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23069 Filed 12-16-25; 8:45 am]
BILLING CODE 8011-01-P