[Federal Register Volume 87, Number 30 (Monday, February 14, 2022)]
[Notices]
[Pages 8316-8318]
[FR Doc No: 2022-03021]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-94186; File No. SR-CboeEDGX-2022-006]

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

February 8, 2022.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on February 1, 2022, Cboe EDGX Exchange, Inc. (the ``Exchange'' or
``EDGX'') 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 EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX Options'')
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/options/regulation/rule_filings/edgx/), 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 by clarifying the
definition of the existing fee code in connection with trades at the
EDGX Options open and adopting a fee code in connection with trades at
the open of the Complex Order Book (``COB''), effective February 1,
2022.
    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 options venues to which market participants
may direct their order flow. Based on publicly available information,
no single options exchange has more than 15% of the market share and
currently the Exchange represents only approximately 4.5% of the market
share.\3\ Thus, in such a low-concentrated and highly competitive
market, no single options exchange,

including the Exchange, possesses significant pricing power in the
execution of option order flow. The Exchange believes that the ever-
shifting market share among the exchanges from month to month
demonstrates that market participants can shift order flow or
discontinue to reduce use of certain categories of products, in
response to fee changes. Accordingly, competitive forces constrain the
Exchange's transaction fees, and market participants can readily trade
on competing venues if they deem pricing levels at those other venues
to be more favorable.
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    \3\ See Cboe Global Markets U.S. Options Market Monthly Volume
Summary (January 26, 2022), available at https://markets.cboe.com/us/options/market_statistics/.
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    The Exchange's Fees Schedule sets forth standard rebates and rates
applied per contract. For example, the Exchange provides standard
rebates ranging from $0.01 up to $0.21 per contract for Customer orders
in both Penny and Non-Penny Securities. The Fee Codes and Associated
Fees section of the Fees Schedule also provides for certain fee codes
associated with certain order types and market participants that
provide for various other fees or rebates. Fee code OO, for example, is
appended to all orders executed (i.e., in any capacity) as part of the
EDGX Options opening and assesses no fee. The Exchange proposes to
amend the definition of fee code OO to clarify that it applies to
orders executed as part of the EDGX Options opening on the simple order
book,\4\ and proposes to adopt fee code OC, which applies to all orders
executed as part of the EDGX Options opening on the COB and assesses no
fee.\5\ The proposed rule change is merely intended to add clarity
regarding the fee codes that apply in connection with orders that
participate in the Exchange's opening processes for its different order
books. All orders executed on the open, whether the open for the simple
order book or the COB, will continue to transact free of charge. The
Exchange notes that the Fee Schedule of the Exchange's affiliated
options exchange, Cboe C2 Exchange, Inc. (``C2 Options'') applies
substantively identical fee codes for trades at the open of its simple
order book and for trades at the open of its complex order book.\6\
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    \4\ See Securities Exchange Act Release No. 76453 (November 17,
2015), 80 FR 72999 (November 23, 2015) (SR-EDGX-2015-56), which
provides that an order that participates in the EDGX Options opening
process under Exchange Rule 21.7 would yield fee code OO. Rule 21.7
governs the opening auction process for the Exchange's simple order
book.
    \5\ The proposed rule change also adds fee code OC to the
``Complex Order Types'' table under footnote 8 of the Fee Schedule.
    \6\ See C2 Options Fee Schedule, Fee Codes and Associated Fees,
fee codes OO and OC.
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2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ 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) \9\ requirement that the rules of an exchange not be
designed to permit unfair discrimination between customers, issuers,
brokers, or dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ Id.
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    In particular, the Exchange believes that the proposed rule change
is reasonable as it is intended to provide additional clarity in the
Fee Schedule regarding the fee codes that apply in connection with
orders that participate in the Exchange's opening processes for its
simple order book and COB and all orders executed on either open may
transact free of charge. The Exchange again notes that the C2 Options
Fee Schedule applies substantively identical fee codes for trades at
the open of its simple order book and for trades at the open of its
complex order book.\10\ The Exchange believes that the proposed rule
change is equitable and not unfairly discriminatory as fee codes OO and
OC apply automatically and uniformly to all orders executed upon the
open of the simple order book or COB, respectively.
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    \10\ See supra note 6.
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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. The Exchange does not
believe that the proposed rule change will impose any burden on
intramarket competition because fee codes OO and OC apply automatically
and uniformly to all orders executed upon the open of the simple order
book or COB, respectively. The Exchange does not believe that the
proposed rule change will impose any burden on intermarket competition
because the proposed rule change is merely intended to provide
additional clarity in the Fee Schedule regarding the fee codes that
apply in connection with orders that participate in the Exchange's
opening processes for its simple order book and COB and all orders
executed on either open may continue to transact free of charge. The
Exchange again notes that the C2 Options Fee Schedule applies
substantively identical fee codes for trades at the open of its simple
order book and for trades at the open of its complex order book.\11\
Also, as previously discussed, the Exchange operates in a highly
competitive market. TPHs have numerous alternative venues they may
participate on and direct their order flow, including 15 other options
exchanges. Additionally, the Exchange represents a small percentage of
the overall market. Based on publicly available information, no single
options exchange has more than 15% of the market share. Therefore, no
exchange possesses significant pricing power in the execution of order
flow. Indeed, participants can readily choose to send their orders to
other exchanges if they deem fee levels at those other venues to be
more favorable. As noted above, the Exchange believes that the proposed
fee changes are comparable to that of other exchanges offering similar
functionality. 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.'' 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' . . . .''. 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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    \11\ See supra note 6.
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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 \12\ and paragraph (f) of Rule 19b-4 \13\
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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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 (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include
File Number SR-CboeEDGX-2022-006 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-CboeEDGX-2022-006. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (http://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing also will be available for inspection
and copying at the principal office of the Exchange. All comments
received will be posted without change. Persons submitting comments are
cautioned that we do not redact or edit personal identifying
information from comment submissions. You should submit only
information that you wish to make available publicly. All submissions
should refer to File Number SR-CboeEDGX-2022-006 and should be
submitted on or before March 7, 2022.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\14\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-03021 Filed 2-11-22; 8:45 am]
BILLING CODE 8011-01-P


[Federal Register Volume 83, Number 85 (Wednesday, May 2, 2018)]
[Notices]
[Page 19386]
[FR Doc No: 2018-09270]

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SECURITIES AND EXCHANGE COMMISSION

Submission for OMB Review; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736

Extension:
    Rule 17g-10 Form ABS Due Diligence--15; SEC File No.270-597, OMB
Control No. 3235-0694

    Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') has submitted to the Office of Management
and Budget (``OMB'') a request for approval of extension of the
previously approved collection of information provided for in Rule 17g-
10 and Form ABS Due Diligence--15E under the Securities Exchange Act of
1934 (15 U.S.C. 78a et seq.).\1\
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    \1\ See 17 CFR 240.17g-1 and 17 CFR 249b.300.
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    Rule 17g-10 contains certain certification requirements for third-
party due diligence service providers that are employed by an NRSRO, an
issuer, or an underwriter, which must be made on Form ABS Due
Diligence--15E. The Commission estimates that the total burden for
respondents to comply with Rule 17g-10 is 238 hours.
    The Commission may not conduct or sponsor a collection of
information unless it displays a currently valid OMB control number. No
person shall be subject to any penalty for failing to comply with a
collection of information subject to the PRA that does not display a
valid Office of Management and Budget (OMB) control number.
    Background documentation for this information collection may be
viewed at the following website: www.reginfo.gov. Comments should be
directed to: (i) Desk Officer for the Securities and Exchange
Commission, Office of Information and Regulatory Affairs, Office of
Management and Budget, Room 10102, New Executive Office Building,
Washington, DC 20503, or by sending an email to:
[email protected]; and (ii) Pamela Dyson, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F St NE, Washington, DC 20549 or send an email to:
[email protected]. Comments must be submitted to OMB within 30 days
of this notice.

    Dated: April 26, 2018.
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-09270 Filed 5-1-18; 8:45 am]
 BILLING CODE 8011-01-P