[Federal Register Volume 83, Number 179 (Friday, September 14, 2018)]
[Notices]
[Pages 46774-46775]
[FR Doc No: 2018-19967]

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DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Summary Notice No. 2018-68]

Petition for Exemption; Summary of Petition Received; Powers
Flight Group

AGENCY: Federal Aviation Administration (FAA), DOT.

ACTION: Notice.

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SUMMARY: This notice contains a summary of a petition seeking relief
from specified requirements of Title 14 of the Code of Federal
Regulations. The purpose of this notice is to improve the public's
awareness of, and participation in, the FAA's exemption process.
Neither publication of this notice nor the inclusion or omission of
information in the summary is intended to affect the legal status of
the petition or its final disposition.

DATES: Comments on this petition must identify the petition docket
number and must be received on or before October 4, 2018.

ADDRESSES: Send comments identified by docket number FAA-2018-0574
using any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov and follow the online instructions for sending your
comments electronically.
     Mail: Send comments to Docket Operations, M-30; U.S.
Department of Transportation (DOT), 1200 New Jersey Avenue SE, Room
W12-140, West Building Ground Floor, Washington, DC 20590-0001.
     Hand Delivery or Courier: Take comments to Docket
Operations in Room W12-140 of the West Building Ground Floor at 1200
New Jersey Avenue SE, Washington, DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
     Fax: Fax comments to Docket Operations at<PHONE_NUMBER>.
    Privacy: In accordance with 5 U.S.C. 553(c), DOT solicits comments
from the public to better inform its rulemaking process. DOT posts
these comments, without edit, including any personal information the
commenter provides, to http://www.regulations.gov, as described in the
system of records notice (DOT/ALL-14 FDMS), which can be reviewed at
http://www.dot.gov/privacy.
    Docket: Background documents or comments received may be read at
http://www.regulations.gov at any time. Follow the online instructions
for accessing the docket or go to the Docket Operations in Room W12-140
of the West Building Ground Floor at 1200 New Jersey Avenue SE,
Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.

FOR FURTHER INFORMATION CONTACT: Jake Troutman,<PHONE_NUMBER>, 800
Independence Avenue SW, Washington, DC 20591.
    This notice is published pursuant to 14 CFR 11.85.

    Issued in Washington, DC, on August 30, 2018.
Lirio Liu,
Executive Director, Office of Rulemaking.

Petition for Exemption

    Docket No.: FAA-2018-0574.
    Petitioner: Powers Flight Group.
    Section(s) of 14 CFR Affected: Sec. Sec.  91.7(a); 91.119(c);
91.121; 91.151(b); 91.405(a); 91.407(a)(1); 91.409(a)(1) & (2);
91.417(a) & (b); 137.19 (c), (d) & (e)(2)(ii)(iii) and (v); 137.31;
137.33; 137.41(c); 137.42.
    Description of Relief Sought: The petitioner is requesting relief
to commercially operate the HSE-UAV AG V6A+ v2 unmanned aircraft system
(UAS), while weighing over 55 pounds (lbs) but no more than 75.3 lbs,
for controlled, low-risk, precision commercial agriculture-related
services, including: multi-spectral crop analysis; ground moisture
analysis; herbicide, pesticide and insecticide; aerial imagery, and 3D
modeling; in certain remote rural areas of the United States. The
petitioner is also requesting relief to conduct the proposed operation,
using UAS weighing more then 55 lbs, with a Remote Pilot Certificate.

[FR Doc. 2018-19967 Filed 9-13-18; 8:45 am]
 BILLING CODE 4910-13-P


[Federal Register Volume 88, Number 227 (Tuesday, November 28, 2023)]
[Notices]
[Pages 83176-83179]
[FR Doc No: 2023-26189]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-99012; File No. SR-CboeEDGA-2023-020]

Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice
of Filing and Immediate Effectiveness of a Proposed Rule Change To
Amend Its Fee Schedule

November 22, 2023.
    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 November 10, 2023, Cboe EDGA Exchange, Inc. (the ``Exchange'' or
``EDGA'') 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 EDGA Exchange, Inc. (the ``Exchange'') proposes to amend its
Fee Schedule. The text of the proposed rule change is provided in
Exhibit 5.
    The text of the proposed rule change is also available on the
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/edga/), 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 Fee Schedule applicable to its
equities trading platform (``EDGA Equities'') by modifying its Add/
Remove Volume Tiers. The Exchange proposes to implement these changes
effective November 1, 2023.\3\
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    \3\ The Exchange initially filed the proposed fee change on
November 1, 2023 (SR-CboeEDGA-2023-019). On November 10, 2023, the
Exchange withdrew that filing and submitted this proposal.
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    The Exchange first notes that it operates in a highly competitive
market in which market participants can readily direct order flow to
competing venues if they deem fee levels at a particular venue to be
excessive or incentives to be insufficient. More specifically, the
Exchange is only one of 16 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,\4\ no single registered equities exchange has more than
17% 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 $0.00160 per
share for orders that remove liquidity and assesses a fee of $0.0030
per share for orders that add liquidity.\5\ For orders in securities
priced below $1.00, the Exchange does not assess any fees or provide
any rebates for orders that add or remove liquidity.\6\ 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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    \4\ See Cboe Global Markets, U.S. Equities Market Volume
Summary, Month-to-Date (October 27, 2023), available at https://www.cboe.com/us/equities/market_statistics/.
    \5\ See EDGA Equities Fee Schedule, Standard Rates.
    \6\ Id.
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Add/Remove Volume Tiers
    Under footnote 7 of the Fee Schedule, the Exchange currently offers
various Add/Remove Volume Tiers. In particular, the Exchange offers
three Add Volume Tiers that each assess a reduced fee for Members'
qualifying orders yielding fee codes 3,\7\ 4,\8\ B,\9\ V,\10\ and
Y,\11\ where a Member reaches certain add volume-based criteria. The
Exchange is proposing to introduce a new Add Volume Tier 4. The
proposed criteria is as follows:
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    \7\ Fee code 3 is appended to orders that add liquidity to EDGA
in Tape A or Tape C securities during the pre and post market.
    \8\ Fee code 4 is appended to orders that add liquidity to EDGA
in Tape B securities during the pre and post market.
    \9\ Fee code B is appended to orders that add liquidity to EDGA
in Tape B securities.
    \10\ Fee code V is appended to orders that add liquidity to EDGA
in Tape A securities.
    \11\ Fee code Y is appended to orders that add liquidity to EDGA
in Tape C securities.

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     Proposed Tier 4 assesses a reduced fee of $0.0014 per
share for securities priced at or above $1.00 to qualifying orders
(i.e., orders yielding fee codes 3, 4, B, V, or Y) where a Member adds
or removes an ADV \12\ >=0.90% of the TCV.\13\
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    \12\ ``ADV'' means average daily volume calculated as the number
of shares added to, removed from, or routed by, the Exchange, or any
combination or subset thereof, per day. ADV is calculated on a
monthly basis.
    \13\ ``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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    The Exchange believes that proposed Add Volume Tier 4 will
incentivize Members to add volume to and remove volume from the
Exchange, thereby contributing to a deeper and more liquid market,
which benefits all market participants and provides greater execution
opportunities on the Exchange. The Exchange further believes the
proposed reduced fee associated with proposed Add Volume Tier 4
provides a fee commensurate with the difficulty of meeting the criteria
associated with the tier.
    In addition to the Add Volume Tiers offered under footnote 7, the
Exchange also offers three Remove Volume Tiers that each provide an
enhanced rebate for Members' qualifying orders yielding fee codes
N,\14\ W,\15\ 6 \16\ and BB,\17\ where a Member reaches certain remove
volume-based criteria. Currently Members who satisfy the criteria of
Remove Volume Tier 2 receive an enhanced rebate of $0.0022 per share
for securities priced at or above $1.00. The Exchange now proposed to
revise the enhanced rebate associated with Remove Volume Tier 2. As
proposed, Members who satisfy the criteria of Remove Volume Tier 2 will
receive an enhanced rebate of $0.0020 per share for securities priced
at or above $1.00. The purpose of reducing the enhanced rebate
associated with Remove Volume Tier 2 is for business and competitive
reasons, as the Exchange believes that reducing such rebate as proposed
would decrease the Exchange's expenditures with respect to transaction
pricing in a manner that is still consistent with the Exchange's
overall pricing philosophy of encouraging added liquidity. The Exchange
notes that despite the modest decrease in the enhanced rebate
associated with Remove Volume Tier 2, the enhanced rebate remains
competitive and continues to be in-line with the enhanced rebate
provided under Remove Volume Tier 1 and Remove Volume Tier 3 (discussed
infra).
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    \14\ Fee code N is appended to orders that remove liquidity from
EDGA in Tape C securities.
    \15\ Fee code W is appended to orders that remove liquidity from
EDGA in Tape A securities.
    \16\ Fee code 6 is appended to orders that remove liquidity from
EDGA in all tapes in the pre and post market.
    \17\ Fee code BB is appended to orders that remove liquidity
from EDGA in Tape B securities.
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    Additionally, the Exchange proposes to amend Remove Volume Tier 3.
Currently, the criteria for Remove Volume Tier 3 is as follows:
     Remove Volume Tier 3 provides an enhanced rebate of
$0.0024 per share for securities priced at or above $1.00 to qualifying
orders (i.e., orders yielding fee codes N, W, 6, or BB) where (1)
Member adds or removes a Step-Up ADV from May 2021 >=0.05% of the TCV
or Member adds or removes a Step-Up ADV from May 2021 >=3,000,000
shares; and (2) Member adds an ADV >=0.05% or Member adds an ADV
>=3,000,000 shares.
    The proposed criteria for Remove Volume Tier 3 is as follows:
     Proposed Remove Volume Tier 3 provides an enhanced rebate
of $0.0022 per share for securities priced at or above $1.00 to
qualifying orders (i.e., orders yielding fee codes N, W, 6, or BB)
where a Member adds or removes an ADV >=0.25% of the TCV.
    The proposed criteria is less stringent than the current criteria
as the proposed criteria does not have a Step-Up ADV component. The
Exchange believes that proposed Remove Volume Tier 3 will incentivize
Members to add volume to and remove volume from the Exchange, thereby
contributing to a deeper and more liquid market, which benefits all
market participants and provides greater execution opportunities on the
Exchange. While the proposed rebate under Remove Volume Tier 3 is less
than the current rebate provided under such tier, the Exchange believes
the proposed enhanced rebate associated with proposed Remove Volume
Tier 3 provides a rebate commensurate with the difficulty of meeting
the criteria associated with the tier and is in-line with the enhanced
rebates provided under Remove Volume Tiers 1 and 2.
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.\18\ Specifically, the Exchange believes the proposed rule change
is consistent with the section 6(b)(5) \19\ 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) \20\ 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) \21\
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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    \18\ 15 U.S.C. 78f(b).
    \19\ 15 U.S.C. 78f(b)(5).
    \20\ Id.
    \21\ 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 proposal to introduce Add Volume Tier 4, reduce the rebate provided
under Remove Volume Tier 2, and modify Remove Volume Tier 3 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,\22\
including the Exchange,\23\ 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 of 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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    \22\ See e.g., BYX Equities Fee Schedule, Footnote 1, Add/Remove
Volume Tiers.
    \23\ See e.g., EDGA Equities Fee Schedule, Fee Codes 3 and 6.

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    In particular, the Exchange believes its proposal to introduce Add
Volume Tier 4 and modify Remove Volume Tiers 2 and 3 is reasonable
because the tiers will be available to all Members and provide all
Members with an additional opportunity to receive a reduced fee or an
enhanced rebate. The Exchange further believes that despite any
proposed reduced rebates, the proposed Add Volume Tier 4 and modified
Remove Volume Tiers 2 and 3 will provide a reasonable means to
encourage adding and/or removing 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 or an enhanced rebate on qualifying orders. An
overall increase in activity would deepen the Exchange's liquidity
pool, offers additional cost savings, support the quality of price
discovery, promote market transparency and improve market quality, for
all investors.
    In addition, the Exchange believes that its proposal to lower the
enhanced rebate paid to Members that satisfy the criteria of Remove
Volume Tier 2 is reasonable, equitable, and consistent with the Act
because such change is designed to decrease the Exchange's expenditures
with respect to transaction pricing in order to offset some of the
costs associated with the Exchange's current pricing structure, which
provides various rebates for liquidity-removing orders, and the
Exchange's operations generally, in a manner that is consistent with
the Exchange's overall pricing philosophy of encouraging added
liquidity. The proposed lower enhanced rebate ($0.0020 per share) is
reasonable and appropriate because it represents only a modest decrease
from the current enhanced rebate ($0.0022 per share) and remains
competitive with the reduced fees offered under Remove Volume Tier 1
and proposed Remove Volume Tier 3. The Exchange further believes that
the proposed decrease to the enhanced rebate associated with Remove
Volume Tier 2 is not unfairly discriminatory because it applies to all
Members equally, in that all Members will receive the reduced fee upon
satisfying the criteria of Remove Volume Tier 2.
    Similarly, the Exchange believes its proposal to lower the enhanced
rebate to Members that satisfy the criteria of Remove Volume Tier 3 is
reasonable, equitable, and consistent with the Act because such is
commensurate with the new proposed criteria. As noted above, the
proposed criteria under Remove Volume Tier 3 is less stringent than the
existing criteria as there is no Step-Up ADV component. The Exchange
further believes that the proposed decrease to the enhanced rebate
associated with Remove Volume Tier 3 is not unfairly discriminatory
because it applies to all Members equally, in that all Members will
receive the reduced fee upon satisfying the criteria of Remove Volume
Tier 3.
    The Exchange believes the proposed Add Volume Tier 4 and the
proposed modified Remove Volume Tier 3 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
new and revised tiers and have the opportunity to meet the tiers'
criteria and receive the corresponding reduced fee or enhanced rebate
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 one Member will be able to satisfy proposed
Add Volume Tier 4, and at least five Members will be able to satisfy
proposed Remove Volume Tier 3. 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 enhanced rebate or reduced fee.

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 changes 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 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
introduction of Add Volume Tier 4 and the proposed changes to Remove
Volume Tiers 2 and 3 will apply to all Members equally in that all
Members are eligible for each of the Tiers, have a reasonable
opportunity to meet the Tiers' criteria and will receive the reduced
fee or enhanced rebate on their qualifying orders if such criteria are
met. The Exchange does not believe the proposed changes burden
competition, but rather, enhance competition. Despite any proposed
reduced rebate, the Exchange's fee structure is intended to increase
the competitiveness of EDGA by adopting a new pricing incentive and
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.
    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 17% of the market share.\24\ 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.'' \25\ 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.' . . .''.\26\
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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    \24\ Supra note 3 [sic].
    \25\ See Securities Exchange Act Release No. 51808 (June 9,
2005), 70 FR 37496, 37499 (June 29, 2005).
    \26\ 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 \27\ and paragraph (f) of Rule 19b-4 \28\
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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    \27\ 15 U.S.C. 78s(b)(3)(A).
    \28\ 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-CboeEDGA-2023-020 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-CboeEDGA-2023-020. 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-CboeEDGA-2023-020 and should
be submitted on or before December 19, 2023.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12).
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Christina Z. Milnor,
Assistant Secretary.
[FR Doc. 2023-26189 Filed 11-27-23; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 76, Number 147 (Monday, August 1, 2011)]
[Notices]
[Pages 45899-45902]
[FR Doc No: 2011-19328]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64966; File No. SR-NYSEAmex-2011-50]

Self-Regulatory Organizations; NYSE Amex LLC; Notice of Filing
and Immediate Effectiveness of Proposed Rule Change Amending Commentary
.07 to NYSE Amex Rule 904 To Increase Position Limits for Options on
the SPDR[supreg] S&P 500[supreg] Exchange-Traded Fund, Which List and
Trade Under the Option Symbol SPY, and To Update the Names and One
Trading Symbol for the Options Reflected Therein, Including SPY

July 26, 2011.
    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 July 11, 2011, NYSE Amex LLC (the ``Exchange'' or ``NYSE
Amex'') 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.
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    \1\ 15 U.S.C.78s(b)(1).
    \2\ 15 U.S.C. 78a.
    \3\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    The Exchange proposes to amend Commentary .07 to NYSE Amex Rule 904
to increase position limits for options on the SPDR[supreg] S&P
500[supreg] exchange-traded fund (``SPY ETF''),\4\ which list and trade
under the option symbol SPY, and to update the names and one trading
symbol for the options reflected therein, including SPY. The text of
the proposed rule change is available at the Exchange's Web site at
http://www.nyse.com, on the Commission's Web site at http://www.sec.gov, at the Exchange's principal office, and at the
Commission's Public Reference Room.
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    \4\ ``SPDR[supreg],'' ``Standard & Poor's[supreg],''
``S&P[supreg],'' ``S&P 500[supreg],'' and ``Standard & Poor's 500''
are registered trademarks of Standard & Poor's Financial Services
LLC. The SPDR S&P 500 ETF represents ownership in the SPDR S&P 500
Trust, a unit investment trust that generally corresponds to the
price and yield performance of the SPDR S&P 500 Index.
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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 self-regulatory organization
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 those 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 parts of
such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposal is to amend Commentary .07 to NYSE Amex
Rule 904 to increase position limits for SPY options from 300,000 to
900,000 contracts on the same side of the market and to update the
names, and one trading symbol, for the options reflected therein,
including SPY.\5\ The Exchange is basing this proposal on a recently
approved rule change by NASDAQ OMX PHLX (``PHLX'').\6\
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    \5\ By virtue of NYSE Amex Rule 905, which is not amended by
this filing, exercise limits on SPY options would be the same as
position limits for SPY options established in Commentary .07 to
NYSE Amex Rule 904.
    \6\ See Securities Exchange Act Release No. 64695 (June 17,
2011), 76 FR 36942 (June 23, 2011) (SR-Phlx-2011-58). The Exchange
commented favorably on that PHLX proposal, noting that ``the
continued disparate treatment of SPY options, which have a position
limit and are traded on multiple exchanges, versus SPX options,
which have no position limit and are traded exclusively on CBOE [the
Chicago Board Options Exchange], only serves to thwart competition
and harm the marketplace,'' and that the ``PHLX's Proposal to
increase the position limits for SPY options is a step in the right
direction.'' See (http://www.sec.gov/comments/sr-phlx-2011-58/phlx201158-1.pdf).
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Background
    Institutional and retail traders have greatly increased their
demand for SPY options for hedging and trading purposes, such that
these options have experienced an explosive gain in popularity and have
been the most actively traded options in the U.S. in terms of volume
for the last two years. For example, SPY options traded a total of
33,341,698 contracts across all exchanges from March 1, 2011 through
March 16, 2011. In contrast, over the same time period options on the
PowerShares QQQ Trust\SM\, Series 1 (``QQQ''\SM\),\7\ the third [sic]
most actively traded option, traded a total of 8,730,718 contracts
(less than 26.2% of the volume of SPY options).
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    \7\ QQQ options were formerly known as options on the Nasdaq-100
Tracking Stock\SM\ (former option symbol QQQQ\SM\). NASDAQ, Nasdaq-
100 Index, Nasdaq-100 Index Tracking Stock and QQQ are trade/service
marks of The Nasdaq Stock Market, Inc. and have been licensed for
use by Invesco PowerShares Capital Management LLC.
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    Currently, SPY options have a position limit of only 300,000
contracts on the same side of the market while QQQ options, which are
comparable to SPY options but exhibit significantly lower volume, have
a position limit of 900,000 contracts on the same side of the market.
The Exchange believes that SPY options should, like options on QQQ,
have a position limit of 900,000 contracts. Given the increase in
volume and continuous unprecedented demand for trading SPY options, the
Exchange believes that the current position limit of 300,000 contracts
is entirely too low and is a deterrent to the optimal use of the
product for hedging and trading purposes. There are multiple reasons to
increase the position limit for SPY options.
    First, traders have informed the Exchange that the current SPY
option position limit of 300,000 contracts, which has remained flat for
more than five years despite the tremendous trading volume increase, is
no longer sufficient for optimal trading and hedging purposes. SPY
options are, as noted, used by large institutions and traders as a
means to invest in or hedge the overall direction of the market.
Second, SPY options are one-tenth the size of options on the S&P 500
Index, traded under the symbol SPX.\8\ Thus, a position limit of
300,000 contracts in SPY options is equivalent to a 30,000 contract
position limit in options on SPX. Traders who trade SPY options to
hedge positions in SPX options (and the SPY ETF) have indicated on
several occasions that the current position limit for SPY options is
simply too restrictive, which may adversely affect their (and the
Exchange's) ability to provide liquidity in this product. Finally, the
products that are perhaps most comparable to SPY options, namely
options on QQQ, are subject to a 900,000 contract position limit on the
same side of the market.\9\ This has, in light of the huge run-up in
SPY option trading making them the number one nationally-ranked option
in terms of volume, resulted in a skewed and unacceptable SPY option
position limit. Specifically, the position limit for SPY options at
300,000 contracts is but 33% of the position limit for the less active
options on QQQ at 900,000 contracts.\10\ The Exchange proposes that SPY
options similarly be subject to a position limit of 900,000 contracts.
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    \8\ CBOE, which exclusively lists and trades SPX options, has
established that there are no position limits on SPX options. See
CBOE Rule 24.4 and Securities Exchange Act Release No. 44994
(October 26, 2001), 66 FR 55722 (November 2, 2001) (SR-CBOE-2001-
22).
    \9\ See Commentary .07 to Rule 904 and Securities Exchange Act
Release No. 57415 (March 3, 2008), 73 FR 12479 (March 7, 2008) (SR-
Amex-2008-16). See also Securities Exchange Act Release No. 51316
(March 3, 2005), 70 FR 12251 (March 11, 2005) (SR-Amex-2005-029).
    \10\ Similarly to SPY options being one-tenth the size of
options on SPX, QQQ options are also one-tenth the size of options
on the related index NASDAQ-100 Index (option symbol NDX). The
position limit for QQQ options and its related index NDX have a
comparable relationship to that of SPY options and SPX. That is, the
position limit for options on QQQ is 900,000 contracts and there is
no position limit for NDX options.
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    The volume and notional value of SPY options and QQQ options as
well as the volume and market capitalizations of their underlying ETFs,
are set forth below:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Option notional
   Option national rank 2010              Option symbol            Name of underlying      Option ADV 2010        value* as of         Current options
                                                                           ETF                                  December 31, 2010      position limit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1..............................  SPY............................  SPDR S&P 500........  3,625,904 contracts.  $177,823,76 million.  300,000 contracts.
4..............................  QQQ............................  Powershares QQQ       963,502 contracts...  $27,141,91 million..  900,000 contracts.
                                                                   Trust.
--------------------------------------------------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                                                              ETF market
      ETF Nat'l rank 2010           Name of ETF          ETF ADV 2010       capitalization        ETF average
                                                                           December 31, 2010     dollar volume
----------------------------------------------------------------------------------------------------------------
1.............................  SPDR S&P 500.......  210,232,241 shares.  $90,280.71 million  $20,794 million
3.............................  Powershares QQQ      85,602,200 shares..  $23,564.8 million.  $3,593 million
                                 Trust.
----------------------------------------------------------------------------------------------------------------
* Notional value is calculated as follows: OI x Close x 100; where OI = underlying security's open interest (in
  contracts), Close = closing price of underlying security on 12/31/2010.

    The Exchange notes that the Large Option Position Reporting
requirement in NYSE Amex Rule 906 would continue to apply. Rule 906
requires ATP Holders to file a report with the Exchange with respect to
each account in which the ATP Holder has an interest; each account of a
partner, officer, director, trustee or employee of such ATP Holder; and
each customer account that has established an aggregate position
(whether long or short) that meets certain determined thresholds (e.g.,
200 or more option contracts if the underlying security is a stock or
Exchange-Traded Fund Share). Rule 906 also permits the Exchange to
impose a higher margin requirement upon the account of an ATP Holder
when it determines that the account maintains an under-hedged position.
Furthermore, large stock holdings must be disclosed to the Commission
by way of Schedules 13D or 13G.\11\
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    \11\ 17 CFR 240.13d-1
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    Monitoring accounts maintaining large positions provides the
Exchange with the information necessary to determine whether to impose
additional margin and/or whether to assess capital charges upon an ATP
Holder carrying the account. In addition, the Commission's net capital
rule, Rule 15c3-1 under the Securities Exchange Act of 1934
(``Act''),\12\ imposes a capital charge on ATP Holders to the extent of
any margin deficiency resulting from the higher margin requirement,
which should serve as an additional form of protection.
---------------------------------------------------------------------------

    \12\ 17 CFR 240.15c3-1.
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    The Exchange believes that position and exercise limits, at their
current levels, no longer serve their stated purpose. There has been a
steadfast and significant increase over the last decade in the overall
volume of exchange-traded options; position limits, however, have not
kept up with the volume. Part of this volume is attributable to a
corresponding increase in the number of overall market participants,
which has, in turn, brought about additional depth and increased
liquidity in exchange-traded options.\13\
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    \13\ The Commission has previously observed that: ``Since the
inception of standardized options trading, the options exchanges
have had rules imposing limits on the aggregate number of options
contracts that a member or customer could hold or exercise. These
rules are intended to prevent the establishment of options positions
that can be used or might create incentives to manipulate or disrupt
the underlying market so as to benefit the options position. In
particular, position and exercise limits are designed to minimize
the potential for mini-manipulations and for corners or squeezes of
the underlying market. In addition such limits serve to reduce the
possibility for disruption of the options market itself, especially
in illiquid options classes.'' See Securities Exchange Act Release
No. 39489 (December 24, 1997), 63 FR 276, 278 (January 5, 1998) (SR-
CBOE-97-11) (footnote omitted).
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    As the anniversary of listed options trading approaches its
fortieth year, the Exchange believes that the existing surveillance
procedures and reporting requirements at the Exchange, other options
exchanges, and at the several clearing firms are capable of properly
identifying unusual and/or illegal trading activity. In addition,
routine oversight inspections of the Exchange's regulatory programs by
the Commission have not uncovered any material inconsistencies or
shortcomings in the manner in which the Exchange's market surveillance
is conducted. These procedures utilize daily monitoring of market
movements via automated surveillance techniques to identify unusual
activity in both options and underlying stocks.\14\
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    \14\ These procedures have been effective for the surveillance
of SPY options trading and will continue to be employed.
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    Finally, the Exchange believes that while position limits on
options on QQQ, which as noted are similar to SPY options, has been
gradually expanded from 75,000 contracts to the current level of
900,000 contracts since 2005, there have been no adverse effects on the
market as a result of this position limit increase.\15\ Likewise, there
have been no adverse effects on the market from expanding the position
limit for SPY options from 75,000 contracts to the current level of
300,000 contracts in 2005.\16\
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    \15\ See supra note 9. See e-mail from Joseph Corcoran, Chief
Counsel, NYSE to Arisa Tinaves, Special Counsel, Division of Trading
and Markets, dated July 19, 2011.
    \16\ See Securities Exchange Act Release No. 51043 (January 14,
2005), 70 FR 3402 (January 24, 2005) (SR-Amex-2005-06).
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    The Exchange believes that restrictive option position limits
prevent large customers, such as mutual funds and pension funds, from
using options to gain meaningful exposure to and hedging protection
through the use of SPY options. This can result in lost liquidity in
both the options market and the equity market. The proposed position
limit increase would remedy this situation to the benefit of large as
well as retail traders, investors, and public customers. The Exchange
believes that increasing position and exercise limits for SPY options
would lead to a more liquid and competitive market environment for SPY
options that would benefit customers interested in this product.
Update to Names
    The Exchange proposes non-substantive technical changes to update
the names and one trading symbol for the option products specifically
identified within Commentary .07 to NYSE Amex Rule 904. This change
would result in Commentary .07 reflecting the current names and symbols
by which these products trade in the marketplace as follows: Nasdaq-100
Tracking Stock (QQQQ) changes to PowerShares QQQ Trust\SM\, Series 1
(QQQ); Standard & Poor's Depositary Receipts Trust (SPDR) changes to
SPDR[supreg] S&P 500[supreg] ETF (SPY); and DIAMONDS Trust changes to
SPDR[supreg] Dow Jones Industrial Average\SM\ ETF Trust (DIA).
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \17\ of
the Act, in general, and furthers the objectives of Section
6(b)(5),\18\ in particular, in that it is 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 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. The Exchange is proposing to expand
the position limits on SPY options. The Exchange believes that this
proposal would be beneficial to large market makers (which generally
have the greatest potential and actual ability to provide liquidity and
depth in the product), as well as retail traders, investors, and public
customers.
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    \17\ 15 U.S.C. 78f(b).
    \18\ 15 U.S.C. 78f(b)(5).
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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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received written comments on
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action

    Because the proposed rule change does not (i) Significantly affect
the protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become

operative prior to 30 days from the date on which it was filed, or such
shorter time as the Commission may designate, if consistent with the
protection of investors and the public interest, provided that the
self-regulatory organization has given the Commission written notice of
its intent to file the proposed rule change at least five business days
prior to the date of filing of the proposed rule change or such shorter
time as designated by the Commission, the proposed rule change has
become effective pursuant to Section 19(b)(3)(A) of the Act \19\ and
Rule 19b-4(f)(6)(iii) thereunder.\20\
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    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) \21\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\22\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. The Exchange has
requested that the Commission waive the 30-day operative delay so that
the proposal may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest,
because increasing position and exercise limits for SPY options would
lead to a more liquid and competitive market environment that would
benefit customers interested in this product. Additionally, it will
enable the Exchange's position and exercise limits for SPY options to
be consistent with those of other exchanges that have already adopted
the higher position and exercise limits. Therefore, the Commission
designates the proposal operative upon filing.\23\
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    \21\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires that a self-regulatory organization submit to the
Commission written notice of its intent to file the proposed rule
change, along with a brief description and text of the proposed rule
change, at least five business days prior to the filing of the
proposed rule change, or such shorter time as designated by the
Commission. The Commission notes that the Exchange has satisfied
this requirement.
    \22\ 17 CFR 240.19b-4(f)(6)(iii).
    \23\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
---------------------------------------------------------------------------

    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.

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 e-mail to<EMAIL_ADDRESS>Please include
File Number SR-NYSEAmex-2011-50 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington DC 20549-1090.

All submissions should refer to File Number SR-NYSEAmex-2011-50. This
file number should be included on the subject line if e-mail 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 Web site (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 Web site
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 such filing also will be
available for inspection and copying at the principal office of the
Exchange. All comments received will be posted without change; the
Commission does not edit personal identifying information from
submissions. You should submit only information that you wish to make
available publicly. All submissions should refer to File No. SR-
NYSEAmex-2011-50 and should be submitted on or before August 22, 2011.

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\24\
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    \24\ 17 CFR 200.30-3(a)(12).
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Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-19328 Filed 7-29-11; 8:45 am]
BILLING CODE 8011-01-P