82002 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

21See supra note 15 [sic]. 

22Based on OCC data, the Exchange’s market 

share in equity-based options increased from 7.73% 

for the month of August 2019 to 8.18% for the 

month of August 2020. See supra note 16 [sic]. 

23See, e.g., supra note 17 [sic]. 

24 15 U.S.C. 78s(b)(3)(A). 

25 17 CFR 240.19b–4(f)(2). 

26 15 U.S.C. 78s(b)(2)(B). 27 17 CFR 200.30–3(a)(12). 

were eligible for the Incentive, the 

proposed elimination of the Incentive 

would remove a potential burden on 

competition in that it would level the 

playing field for all Firms operating on 

the Exchange. 

Intermarket Competition. The 

Exchange operates in a highly 

competitive market in which market 

participants can readily favor one of the 

16 competing option exchanges if they 

deem fee levels at a particular venue to 

be excessive. In such an environment, 

the Exchange must continually adjust its 

fees to remain competitive with other 

exchanges and to attract order flow to 

the Exchange. Based on publiclyavailable information, and excluding 

index-based options, no single exchange 

currently has more than 16% of the 

market share of executed volume of 

multiply-listed equity and ETF options 

trades.21 Therefore, no exchange 

currently possesses significant pricing 

power in the execution of multiplylisted equity and ETF options order 

flow. More specifically, in August 2020, 

the Exchange had less than 10% market 

share of executed volume of multiplylisted equity and ETF options trades.22

The Exchange believes that the 

proposed rule change reflects this 

competitive environment because it 

modifies the Exchange’s fees and rebates 

in a manner designed to encourage ATP 

Holders to direct trading interest to the 

Exchange, to provide liquidity and to 

attract order flow. To the extent that this 

purpose is achieved, all the Exchange’s 

market participants should benefit from 

the improved market quality and 

increased opportunities for price 

improvement. The Exchange also 

believes that the proposed rule change 

reflects this competitive environment 

because it removes an underutilized 

Incentive that did not achieve its 

intended purpose of attracting order 

flow. 

The Exchange believes that the 

proposed changes could promote 

competition between the Exchange and 

other execution venues, including those 

that currently offer similar pricing 

incentives, by encouraging additional 

orders to be sent to the Exchange for 

execution.23

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 24 of the Act and 

subparagraph (f)(2) of Rule 19b–4 25

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

under Section 19(b)(2)(B) 26 of the Act to 

determine whether the proposed rule 

change should be approved or 

disapproved. 

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 rule-comments@

sec.gov. Please include File Number SR– 

NYSEAMER–2020–84 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–NYSEAMER–2020–84. 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–NYSEAMER–2020–84, and 

should be submitted on or before 

January 7, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27729 Filed 12–16–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90646; File No. SR–FINRA– 

2020–034] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving 

Proposed Rule Change To Modify 

TRACE Dissemination Protocols for 

Agency Pass-Through MBS or SBABacked ABS Traded in Specified Pool 

Transactions 

December 11, 2020. 

I. Introduction 

On October 15, 2020, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 82003 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 90264 

(October 23, 2020), 85 FR 68607 (October 29, 2020) 

(‘‘Notice’’). 

4See Letter from Wendell J. Chambliss, Vice 

President and Deputy General Counsel, Mission, 

Legislative and Regulatory Affairs, Legal Division, 

Freddie Mac, to J. Matthew DeLesDernier, Assistant 

Security, Commission, dated November 18, 2020 

(‘‘Freddie Mac Letter’’). 

5See Securities Exchange Act Release No. 68084 

(October 23, 2012), 77 FR 65436 (October 26, 2012) 

(‘‘FINRA–2012–042 Approval’’). This filing 

provided for, among other things, public 

dissemination of transactions in Agency PassThrough Mortgage-Backed Securities traded in 

specified pools and transactions in SBA-Backed 

Asset-Backed Securities traded in specified pools or 

to be announced, and reduced the reporting 

timeframe for such transactions. 

6FINRA Rule 6710(v) defines an ‘‘Agency PassThrough MBS’’ as ‘‘a type of Securitized Product 

issued in conformity with a program of an Agency 

as defined in [FINRA Rule 6710(k)] or a 

Government-Sponsored Enterprise (‘GSE’) as 

defined in [FINRA Rule 6710(n)], for which the 

timely payment of principal and interest is 

guaranteed by the Agency or GSE, representing 

ownership interest in a pool (or pools) of mortgage 

loans structured to ‘pass through’ the principal and 

interest payments to the holders of the security on 

a pro rata basis.’’ 

7FINRA Rule 6710(bb) defines an ‘‘SBA-Backed 

ABS’’ as ‘‘a Securitized Product issued in 

conformity with a program of the SBA, for which 

the timely payment of principal and interest is 

guaranteed by the SBA, representing ownership 

interest in a pool (or pools) of loans or debentures 

and structured to ‘pass through’ the principal and 

interest payments made by the borrowers in such 

loans or debentures to the holders of the security 

on a pro rata basis.’’ 

8See FINRA Rule 6710(x). 

9See FINRA–2012–042 Approval, 77 FR at 65437. 

10See id. FINRA stated that, in developing the 

approach to public dissemination described in the 

FINRA–2012–042 Approval, it considered industry 

feedback, including concerns that dissemination of 

the CUSIP code in a Specified Pool Transaction 

might result in information leakage regarding 

trading strategies, positions, and other sensitive 

information, which could negatively impact trading 

interest and liquidity in the market for these 

securities. See Notice, 85 FR at 68607. 

11FINRA uses the following ten data elements to 

form the RDID cohorts that describe the security 

traded in a Specified Pool Transaction: (1) Issuer; 

(2) Product Type; (3) Amortization Type; (4) 

Coupon; (5) Original Maturity; (6) Weighted 

Average Coupon (‘‘WAC’’); (7) Weighted Average 

Maturity (‘‘WAM’’); (8) Weighted Average Loan Age 

(‘‘WALA’’); (9) Current Average Loan Size (‘‘ALS’’); 

and (10) Original LTV. For example, RDID #A1234 

might represent: (1) Issuer = FNMA; (2) Product 

Type = Co-Op; (3) Amortization Type = ARM; (4) 

Coupon = 2.0; (5) Original Maturity = 360; (6) WAC 

= 2.5; (7) WAM = 200; (8) WALA = 160; (9) ALS 

= 100; and (10) Original LTV = 50. See id., 85 FR 

at 68607–08. 

12Currently, the rounding and truncation 

conventions that are used for Specified Pool 

Transactions are the following: (1) Coupon— 

Rounded down to the nearest quarter percentage 

point—e.g., an interest rate of 5.12% is rounded to 

5%; (2) Original Maturity—Rounded up to the 

nearest 10—e.g., an original maturity of 358 months 

is rounded to 360 months; (3) WAC—Truncated to 

a single decimal—e.g., a WAC of 7.13% is truncated 

to 7.1%; (4) WAM—Rounded down to the nearest 

10—e.g., a WAM of 87 months is rounded to 80 

month; (5) WALA—Rounded up to the nearest 10— 

e.g., a WALA of 163 months is rounded to 170 

months; (6) ALS—Rounded down to the nearest 

25—e.g., an ALS of 113 (i.e., $113,000 average loan 

size) is rounded to 100 (i.e., $100,000 average loan 

size); and (7) LTV—Rounded down to the nearest 

25—e.g., an original LTV of 72% is rounded to 

50%. See id., 85 FR at 68608. 

13 Id. 

14See id. 

15See id. 

16FINRA has not proposed changes to the 

rounding or truncation conventions utilized for the 

other data elements. 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change to modify the 

Trade Reporting and Compliance Engine 

(‘‘TRACE’’) dissemination protocols for 

Agency Pass-Through Mortgage-Backed 

Securities or Small Business 

Administration (‘‘SBA’’)-Backed AssetBacked Securities traded in Specified 

Pool Transactions. The proposed rule 

change was published for comment in 

the Federal Register on October 29, 

2020.3 The Commission received one 

comment letter in support of the 

proposed rule change.4 This order 

approves the proposed rule change. 

II. Description of the Proposal 

FINRA commenced public 

dissemination of Specified Pool 

Transactions in 2013 after the 

Commission approved FINRA’s 

proposal to do so in 2012.5 FINRA’s 

rules define a ‘‘Specified Pool 

Transaction’’ as a transaction in an 

Agency Pass-Through Mortgage-Backed 

Security (‘‘Agency Pass-Through 

MBS’’) 6 or an SBA-Backed AssetBacked Security (‘‘SBA-Backed ABS’’) 7

requiring the delivery at settlement of a 

pool or pools that is identified by a 

unique pool identification number at 

the Time of Execution.8 As described in 

the FINRA–2012–042 Approval, when 

disseminating information of a 

Specified Pool Transaction, FINRA does 

not identify the specific bond transacted 

by disclosing its CUSIP code.9 Instead, 

FINRA disseminates more general 

information about the bond and the pool 

underlying the bond, including 

approximations of information widely 

used to project cash flows and 

prepayment rates of the underlying 

mortgages, such as loan-to-value 

(‘‘LTV’’) information.10

Under its public dissemination 

protocol for Specified Pool 

Transactions, FINRA groups the pools 

underlying the transacted bonds into 

cohorts, using data elements that are 

integral to describing and valuing the 

bonds based on these pools, such as the 

LTV ratio. The cohort groupings are 

established using rounded or truncated 

figures for the underlying data elements, 

so that numeric values within each 

cohort can be understood within 

defined ranges. Each cohort is assigned 

a unique identification number—the 

Reference Data Identifier (‘‘RDID’’). 

After a member reports a Specified Pool 

Transaction to TRACE, FINRA 

disseminates the corresponding RDID in 

lieu of disseminating the transacted 

bond’s CUSIP code. The underlying data 

elements that correspond to each RDID 

are made available to members through 

the TRACE system.11 FINRA rounds or 

truncates certain cohort groupings to 

reduce the risk that the specific bond 

traded and the market participant that 

engaged in the transaction might be 

identified.12

FINRA believes ‘‘that the transaction 

information disseminated through 

TRACE should provide investors with 

sufficient information to assess the 

value and price of a security, which for 

Securitized Products, includes 

information necessary to make 

assumptions about cash flows and 

prepayment rates.’’ 13 The elements 

described above are intended to provide 

market participants with the 

information necessary to perform such 

an analysis.14

FINRA stated that, since commencing 

public dissemination of Specified Pool 

Transactions, it has continued to 

evaluate the relevant market and the 

value of the information disseminated to 

market participants.15 As a result of 

these efforts, which included 

discussions with market participants, 

FINRA is now proposing changes to the 

LTV rounding convention used in the 

public dissemination of Specified Pool 

Transactions.16 Specifically, FINRA 

proposes to create more granular cohorts 

for LTV to increase the precision of the 

information regarding the LTV of the 

pool traded. In place of the current LTV 

rounding convention, which is rounded 

down to the nearest 25%, FINRA will 

organize the cohorts such that each 

cohort represents the LTV as the upper 

limit of the applicable category, as 

follows: 

1. For an LTV up to 20%, the cohorts 

would represent the LTV as 20% (such 

that an original LTV of 12% would be 

shown as 20%); 

2. for an LTV between 21% and 40%, 

the cohorts would represent the LTV as 

40% (such that an original LTV of 21% 

would be shown as 40%); 

3. for an LTV between 41% and 60%, 

the cohorts would represent the LTV as 

60% (such that an original LTV of 60% 

would be shown as 60%); 

4. for an LTV between 61% and 80%, 

the cohorts would represent the LTV as 

80% (such that an original LTV of 70% 

would be shown as 80%); 

5. for an LTV between 81% and 93%, 

the cohorts would represent the LTV as 

82004 Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 

17See Notice, 85 FR at 68608. 

18See id., 85 FR at 68609. 

19See id., 85 FR at 68608. FINRA stated, for 

example, that separating pools with LTV ratios at 

or below 80% from those with LTV ratios of 81% 

or higher delineates the pools with mortgages that 

might require mortgage insurance from those that 

might not require mortgage insurance. See id. 

Similarly, FINRA believes that the cohorts for LTV 

ratios of 81% or more are more consistent with the 

way mortgage originators view loan characteristics 

and the way that the market determines pricing. See 

id. 

20See id., 85 FR at 68609. 

21 In approving this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

22 15 U.S.C. 78o–3(b)(6). 

23See FINRA–2012–042 Approval, 77 FR at 

65437–38. 

24 Id., 77 FR at 65437. 

25See id., 77 FR at 65438. 

26See Notice, 85 FR at 68610. 

27See Freddie Mac Letter at 1 (stating that 

‘‘[a]dopting the proposed approach of segmenting 

LTV ratios into eight categories would align TRACE 

data with pooling practices and would enhance 

market transparency while maintaining sufficient 

anonymity’’). 

28See Notice, 85 FR at 68610. 

29 15 U.S.C. 78s(b)(5) (providing that the 

Commission ‘‘shall consult with and consider the 

views of the Secretary of the Treasury prior to 

approving a proposed rule filed by a registered 

securities association that primarily concerns 

conduct related to transactions in government 

securities, except where the Commission 

determines that an emergency exists requiring 

expeditious or summary action and publishes its 

reasons therefor’’). 

30Email from Treasury Department staff to 

Michael Gaw, Assistant Director, Division of 

Trading and Markets, Commission (November 30, 

2020). 

31 15 U.S.C. 78s(b)(6). 

32 15 U.S.C. 78s(b)(2). 

93% (such that an original LTV of 90% 

would be shown as 93%); 

6. for an LTV between 94% and 

100%, the cohorts would represent the 

LTV as 100% (such that an original LTV 

of 100% would be shown as 100%); 

7. for an LTV between 101% and 

120%, the cohorts would represent the 

LTV as 120% (such that an original LTV 

of 105% would be shown as 120%); and 

8. for an LTV of 121% or greater, the 

cohorts would represent the LTV as 

121+ (such that an original LTV of 

125% would be shown as 121+). 

Thus, as a result of the proposed rule 

change, FINRA will disseminate the 

LTV ratio cohorts at 20%, 40%, 60%, 

80%, 93%, 100%, 120%, and 120%+. 

FINRA stated that, in developing the 

new LTV approach, it sought to balance 

the goal of making more detailed 

information available to the market 

against the potential risk of identifying 

the particular security being traded and 

the market participant that engaged in 

the transaction.17 FINRA believes that 

the new LTV rounding convention is a 

‘‘measured change’’ that will provide 

more granular and meaningful 

information on the LTV of the Specified 

Pool Transaction, which should 

increase the value of the disseminated 

information to market participants.18

FINRA also anticipates that the new 

cohorts will improve how disseminated 

TRACE data reflects the role of LTV 

ratios in MBS valuations.19

FINRA has stated that it will 

announce the effective date of the rule 

change in a Regulatory Notice to be 

published no later than 60 days 

following a Commission approval, and 

the effective date will be no later than 

270 days following publication of that 

Regulatory Notice.20

III. Discussion and Commission 

Findings 

After careful consideration, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder applicable to 

a national securities association.21 In 

particular, the Commission finds that 

the proposed rule change is consistent 

with Section 15A(b)(6) of the Act,22

which requires, among other things, that 

FINRA rules be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, and, in general, to 

protect investors and the public interest. 

When it issued the FINRA–2012–042 

Approval, the Commission found that 

the protocols for publicly disseminating 

Specified Pool Transactions proposed 

by FINRA—specifically, eschewing 

dissemination of CUSIP codes and 

instead providing more generic 

information about the bond transacted 

and the underlying pool—were 

consistent with the Act.23 The 

Commission stated that the 

dissemination protocols for the 

specified data elements ‘‘strike an 

appropriate balance between providing 

meaningful post-trade transparency and, 

at the same time, reducing the potential 

for ‘reverse engineering’ of transaction 

data that could permit identification of 

a market participant and/or its trading 

strategy.’’ 24 The Commission also noted 

that FINRA could in the future 

determine to propose dissemination of 

additional data elements that it believes 

would improve transparency for 

Specified Pool Transactions.25

FINRA is now proposing to revise the 

dissemination protocol for Specified 

Pool Transactions by increasing the 

precision of the LTV cohort groupings. 

In place of the current rounding 

convention used for LTV (i.e., rounded 

down to the nearest 25%), FINRA will 

utilize eight cohorts, with each cohort 

representing the LTV as the upper limit 

of the applicable grouping. FINRA 

believes that the tighter bands around 

LTVs will benefit market participants by 

increasing the value of price 

information as it relates to LTV.26

The Commission finds that the 

current proposal is consistent with the 

Act because it represents a measured 

adjustment to the overall public 

dissemination protocols for Specialized 

Pool Transactions that the Commission 

previously found consistent with the 

Act in the FINRA–2012–042 Approval. 

Establishing additional cohorts utilizing 

the proposed LTV thresholds appears 

reasonably designed to provide market 

participants and other market observers 

with more useful information about the 

transacted bonds while minimizing the 

potential for adverse market impact. The 

Commission notes that it received no 

comments suggesting that the proposal 

would have adverse market impact; the 

one comment letter received on the 

proposal was supportive.27 Moreover, 

FINRA has represented that it will 

continue to evaluate the market for 

Specified Pool Transactions and 

evaluate the conventions that it uses for 

disseminating information on these 

transactions.28 The Commission also 

notes that, under this proposal, FINRA 

members will not incur any 

administrative burdens to report 

transactions differently; the creation and 

distribution of the new LTV cohorts will 

be performed by FINRA through the 

TRACE system. 

Pursuant to Section 19(b)(5) of the 

Act,29 the Commission consulted with 

and considered the views of the 

Treasury Department in determining to 

approve the proposed rule change. The 

Treasury Department indicated its 

support for the proposal.30 Pursuant to 

Section 19(b)(6) of the Act,31 the 

Commission has considered the 

sufficiency and appropriateness of 

existing laws and rules applicable to 

government securities brokers, 

government securities dealers, and their 

associated persons in approving the 

proposal. As discussed above, the 

proposed rule change appears 

reasonably designed to improve the 

value to market participants and other 

market observers of the LTV information 

disseminated for Specified Pool 

Transactions. 

IV. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,32 that the 

proposed rule change (SR–FINRA– 

2020–034) is approved. 

Federal Register / Vol. 85, No. 243 / Thursday, December 17, 2020 / Notices 82005 

33 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 90245 

(October 22, 2020), 85 FR 68400. 

4 15 U.S.C. 78s(b)(2). 

5 Id. 

6 17 CFR 200.30–3(a)(31). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes December 1, 2020 (SR–CBOE–2020–113). 

On December 4, 2020, the Exchange withdrew that 

filing and submitted this proposal. 

4See Cboe Global Markets U.S. Options Monthly 

Market Volume Summary (November 25, 2020), 

available at https://markets.cboe.com/us/options/ 

market_statistics/. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.33

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27727 Filed 12–16–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90644; File No. SR– 

NASDAQ–2020–069] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Designation of a Longer Period for 

Commission Action on a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Exclude Special 

Purpose Acquisition Companies From 

the Requirement That at Least 50% of 

a Company’s Round Lot Holders Each 

Hold Unrestricted Securities With a 

Market Value of at Least $2,500 

December 11, 2020. 

On October 8, 2020, The Nasdaq 

Stock Market LLC (‘‘Nasdaq’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

exclude special purpose acquisition 

companies from the requirement that at 

least 50% of a company’s round lot 

holders each hold unrestricted 

securities with a market value of at least 

$2,500. On October 21, 2020, the 

Exchange filed Amendment No. 1 to the 

proposed rule change, which amended 

and replaced the proposed rule change 

in its entirety. The proposed rule 

change, as modified by Amendment No. 

1, was published for comment in the 

Federal Register on October 28, 2020.3

Section 19(b)(2) of the Act 4 provides 

that within 45 days of the publication of 

notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding, or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is December 12, 

2020. The Commission is extending this 

45-day time period. 

The Commission finds it appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change. 

Accordingly, the Commission, pursuant 

to Section 19(b)(2) of the Act,5

designates January 26, 2021, as the date 

by which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change, 

as modified by Amendment No. 1 (File 

No. SR–NASDAQ–2020–069). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27725 Filed 12–16–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90642; File No. SR–CBOE– 

2020–115] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fees 

Schedule With Respect to Certain Fees 

Related to Qualified Contingent Cross 

Transactions the Exchange’s LMM 

Incentive Programs 

December 11, 2020. 

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 December 

4, 2020, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) filed 

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, 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. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

the Fees Schedule with respect to 

certain fees related to Qualified 

Contingent Cross transactions the 

Exchange’s LMM incentive programs. 

The text of the proposed rule change is 

attached [sic] as Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.aspx), at the Exchange’s Office of 

the Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fees Schedule with respect to Qualified 

Contingent Cross (‘‘QCC’’) transaction 

fees and the Exchange’s Lead MarketMaker (‘‘LMM’’) programs.3

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.4 Thus, in 

such a low-concentrated and highly 

competitive market, no single options 

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