82532 Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Notices 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 86360 

(July 11, 2019), 84 FR 34210 (July 17, 2019) (SR– 

NYSE–2019–39). 

4See Securities Exchange Act Release No. 88373 

(March 12, 2020), 85 FR 15533 (March 18, 2020) 

(SR–NYSE–2020–14). 

5See Securities Exchange Act Release No. 89591 

(August 18, 2020), 85 FR 52159 (August 24, 2020) 

(SR–NYSE–2020–14). 

6See Securities Exchange Act Release No. 90180 

(October 14, 2020), 85 FR 66612 (October 20, 2020) 

(SR–NYSE–2020–82). 

(Authority: 39 CFR 211.2) 

Joshua J. Hofer, 

Attorney, Federal Compliance. 

[FR Doc. 2020–27886 Filed 12–17–20; 8:45 am] 

BILLING CODE 7710–12–P 

SECURITIES AND EXCHANGE 

COMMISSION 

(Release No. 34–90661; File No. SR–NYSE– 

2020–99) 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

Proposed Rule Change To Amend Its 

Price List 

December 14, 2020. 

Pursuant to the provisions of Section 

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

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on December 1, 2020, New York Stock 

Exchange LLC (‘‘NYSE’’ or the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) a 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 

The Exchange proposes to amend its 

Price List to (1) extend the Transition 

Period for member organizations to 

transition to the utilization of ports that 

connect to the Exchange using Pillar 

technology; (2) extend the 

Decommission Period that begins once 

the Transition Period ends; and (3) 

extend the effective date that the 

Exchange would prorate the monthly fee 

for ports activated on or after July 1, 

2019. The proposed rule change is 

available on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, 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 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to 

provide additional time for member 

organizations to transition from older to 

newer and more efficient Pillar 

technology. The Exchange is not 

proposing to adjust the amount of the 

port fees or the fees charged to offset the 

Exchange’s continuing costs of 

supporting legacy ports, which will 

remain at the current level for all market 

participants. 

Effective July 3, 2019, the Exchange 

introduced transition pricing designed 

to provide member organizations an 

extended transition period to connect to 

the Exchange using Pillar technology 

with no fee increase. Specifically, the 

Exchange (1) adopted a cap on monthly 

fees for the use of certain ports 

connecting to the Exchange for the 

billing months July 2019 through March 

2020 (the ‘‘Transition Period’’); (2) 

adopted a Decommission Extension Fee 

applicable for the billing months April 

2020 through September 2020 (the 

‘‘Decommission Period’’) for legacy port 

connections; and (3) prorated the 

monthly fee for certain ports activated 

after July 1, 2019, effective April 1, 

2020.3

Effective March 2, 2020, the Exchange 

(1) extended the end of the Transition 

Period from March 2020 to August 2020 

for member organizations to transition 

to the utilization of ports that connect 

to the Exchange using Pillar technology; 

(2) shortened the Decommission Period 

from six months (April 2020-September 

2020) to four months (September– 

December 2020); (3) extended the 

effective date that the Exchange would 

prorate the monthly fee for certain ports 

activated on or after July 1, 2019 from 

April 1, 2020 to September 1, 2020; and 

(4) revised the fees charged for legacy 

port connections during the 

Decommission Period.4

Effective August 1, 2020, the 

Exchange (1) extended the end of the 

Transition Period from August 2020 to 

October 2020; (2) extended the 

beginning of the Decommission Period 

from September 2020 to November 2020 

and the end of the Decommission Period 

from December 2020 to February 2021; 

and (3) extended the effective date that 

the Exchange would prorate the 

monthly fee for ports activated on or 

after July 1, 2019 from September 1, 

2020 to November 1, 2020.5

Effective October 1, 2020, the 

Exchange (1) extended the end of the 

Transition Period from October 2020 to 

December 2020; (2) extended the 

beginning of the Decommission Period 

from November 2020 to January 2021 

and the end of the Decommission Period 

from February 2021 to April 2021; and 

(3) extended the effective date that the 

Exchange would prorate the monthly fee 

for ports activated on or after July 1, 

2019 from November 1, 2020 to January 

1, 2021.6

The Exchange proposes to: 

• Extend the end of the Transition 

Period from December 2020 to February 

2021; 

• extend the beginning of the 

Decommission Period from January 

2021 to March 2021 and the end of the 

Decommission Period from April 2021 

to June 2021; and 

• extend the effective date that the 

Exchange would prorate the monthly fee 

for ports activated on or after July 1, 

2019 from January 1, 2021 to March 1, 

2021. 

The Exchange would continue to 

provide a cap on how much member 

organizations would be charged for 

ports during the proposed extra two 

months of the Transition Period so that 

they would not incur additional charges 

during the transition to Pillar 

communication protocols. Moreover, 

the Exchange would retain a four month 

period during which the few firms that 

do not transition during the proposed 

longer Transition Period would be 

charged fees to offset the Exchange’s 

continuing costs of supporting legacy 

ports but proposes to extend the 

beginning and end dates for this period. 

The Exchange proposes to implement 

these changes to its Price List effective 

December 1, 2020. 

Competitive Environment 

The Exchange operates in a highly 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Notices 82533 

7See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37495, 37499 (June 29, 2005) 

(S7–10–04) (Final Rule) (‘‘Regulation NMS’’). 

8See Securities Exchange Act Release No. 61358, 

75 FR 3594, 3597 (January 21, 2010) (File No. S7– 

02–10) (Concept Release on Equity Market 

Structure). 

9See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. See 

generally https://www.sec.gov/fast-answers/ 

divisionsmarketregmrexchangesshtml.html. 

10See FINRA ATS Transparency Data, available 

at https://otctransparency.finra.org/ 

otctransparency/AtsIssueData. A list of alternative 

trading systems registered with the Commission is 

available at https://www.sec.gov/foia/docs/ 

atslist.htm. 

11See Cboe Global Markets U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. 

12 DMMs completed the transition to Phase II 

ports last year. 

13Only one fee per drop copy port applies, even 

if receiving drop copies from multiple order/quote 

entry ports. 

products, and services in the securities 

markets. 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.’’ 7

While Regulation NMS has enhanced 

competition, it has also fostered a 

‘‘fragmented’’ market structure where 

trading in a single stock can occur 

across multiple trading centers. When 

multiple trading centers compete for 

order flow in the same stock, the 

Commission has recognized that ‘‘such 

competition can lead to the 

fragmentation of order flow in that 

stock.’’ 8 Indeed, equity trading is 

currently dispersed across 16 

exchanges,9 31 alternative trading 

systems,10 and numerous broker-dealer 

internalizers and wholesalers. Based on 

publicly-available information, no 

single exchange has more than 16% of 

the market share of executed volume of 

equity trades (whether excluding or 

including auction volume).11 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 or reduce use of certain 

categories of products, including ports, 

in response to fee changes. Accordingly, 

the Exchange’s fees, including port fees, 

are reasonably constrained by 

competitive alternatives and market 

participants can readily trade on 

competing venues if they deem pricing 

levels at those other venues to be more 

favorable. 

The Exchange is proposing these 

changes in the context of a competitive 

environment in which market 

participants can and do shift order flow, 

or discontinue or reduce use of certain 

categories of products, in response to fee 

changes. Because ports are used by 

member organizations to trade 

electronically on the Exchange, fees 

associated with ports are subject to 

these same competitive forces. The 

Exchange believes that the proposal 

represents a reasonable attempt to 

provide member organizations with 

additional time to effect an orderly 

transition to upgraded technology 

without incurring additional costs. 

Proposed Rule Change 

Member organizations enter orders 

and order instructions, and receive 

information from the Exchange, by 

establishing a connection to a gateway 

that uses communication protocols that 

map to the order types and modifiers 

described in Exchange rules. These 

gateway connections, also known as 

logical port connections, are referred to 

as ‘‘ports’’ on the Exchange’s Price List. 

Legacy ports connect with the Exchange 

via a Common Customer Gateway 

(known as ‘‘CCG’’) that accesses its 

equity trading systems (‘‘Phase I ports’’). 

Beginning July 1, 2019, the Exchange 

began making available ports using 

Pillar gateways to its member 

organizations (‘‘Phase II ports’’). 

Extension of the Date to Prorate Ports 

The Exchange currently makes 

available ports that provide connectivity 

to the Exchange’s trading systems (i.e., 

ports for entry of orders and/or quotes 

(‘‘order/quote entry ports’’)) and charges 

$550 per port per month. Designated 

Market Makers (‘‘DMMs’’) are not 

charged for the first 12 ports per month 

that connect to the Exchange.12 The 

Exchange also currently makes ports 

available for drop copies and charges 

$550 per port per month,13 except that 

DMMs are not charged for drop copy 

ports that connect to the Exchange. 

During the ongoing first phase of the 

Exchange’s transition pricing, the fees 

charged for both order/quote entry and 

drop copy ports are, with certain 

exceptions, capped at—and thus not 

charged for more than—the total 

number of both order/quote entry and 

drop copy ports that the member 

organization has activated as of its June 

2019 invoice. 

Effective January 1, 2021, the 

Exchange will prorate fees for order/ 

quote entry and drop copy ports 

activated after July 1, 2019, to the 

number of trading days that a port is 

eligible for production trading with the 

Exchange, including any scheduled 

early closing days. 

The Exchange proposes to extend the 

effective date for the prorating of order/ 

quote entry and drop copy ports to 

March 1, 2021 to coincide with the end 

of the proposed extended Transition 

Period in February 2021, discussed 

below. 

Extension of the Transition Period 

Currently, during the billing months 

of July 2019 through December 2020 

(the ‘‘Transition Period’’), the total 

number of ports charged per member 

organization is capped at the total 

number of ports that the member 

organization activated as of the June 

2019 invoice, which was the last full 

month prior to the introduction of the 

new gateways (the ‘‘Transition Cap’’). 

Transition Cap pricing is available until 

the earlier of (1) the end of the 

Transition Period, i.e., December 2020, 

or (2) the billing month during which a 

member organization fully transitions to 

using only ports that communicate 

using Pillar phase II protocols. If during 

the Transition Period, a member 

organization increases the number of 

Phase I ports above the Transition Cap, 

those ports would be charged at the 

current rates for order/quote entry ports 

and drop copy ports. Finally, if during 

the Transition Period a member 

organization has a total number of ports 

below the Transition Cap, the Exchange 

would charge a member organization for 

their actual number of ports. 

The Exchange proposes to extend the 

Transition Period by two months to 

February 2020 [sic]. As proposed, the 

charge per port (order/quote entry and 

drop copy) would remain at $550 per 

port per month. DMMs would continue 

not to be charged for drop copy ports 

and for their first 12 order/quote entry 

ports per month that connect to the 

Exchange, and then charged $550 per 

order/quote entry port that connects to 

the Exchange per month thereafter. 

The purpose of Transition Period 

pricing is to cap port fees to allow 

member organizations additional time to 

implement technology changes 

necessary to connect to the Exchange 

using the Phase II ports without 

incurring additional Exchange fees. As 

of November 2020, only 67% of Phase 

I ports have been cancelled, a 1% 

increase over the 66% that had 

transitioned as of September 2020. 

Based on the Exchange’s experience to 

date, the Exchange believes that an 

additional two months will be necessary 

to provide sufficient time for all member 

organizations, regardless of size, to be 

able to complete the necessary changes 

and transition fully to the Phase II ports. 


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82534 Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Notices 

14 15 U.S.C. 78f(b). 

15 15 U.S.C. 78f(b)(4) & (5). 

16See Regulation NMS, 70 FR at 37499. 

17See Securities Exchange Act Release No. 61358, 

75 FR 3594, 3597 (January 21, 2010) (File No. S7– 

02–10) (Concept Release on Equity Market 

Structure). 

18See Cboe Global Markets, U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. See 

generally https://www.sec.gov/fast-answers/ 

divisionsmarketregmrexchangesshtml.html. 

19See FINRA ATS Transparency Data, available 

at https://otctransparency.finra.org/ 

otctransparency/AtsIssueData. A list of alternative 

trading systems registered with the Commission is 

available at https://www.sec.gov/foia/docs/ 

atslist.htm. 

20See Cboe Global Markets U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. 

Extension of the Decommission Period 

Currently, member organizations that 

have not transitioned to Phase II ports 

and are still utilizing Phase I ports 

during the billing months of January 

2021 through April 2021 (i.e., the 

Decommission Period), would, in 

addition to the current port fees, be 

charged a Decommission Extension Fee 

of $1,000 per port per month, increasing 

by $1,000 per port for each month for 

any ports that communicate using Pillar 

phase I protocols. As per the Price List, 

ports using Pillar phase I protocols 

would no longer be available beginning 

May 1, 2021. 

The Exchange proposes that the 

Decommission Period would begin in 

March 2021, after the end of the 

proposed longer Transition Period, and 

end four months later. As proposed, the 

Decommission Period would commence 

in March 2021 and end in June 2021. As 

a result, the Price List would also be 

amended to provide that ports using 

Pillar phase I protocols would no longer 

be available beginning July 1, 2021. 

As noted above, the Exchange 

believes that extending the Transition 

Period would provide sufficient time for 

member organizations to fully transition 

to Phase II ports and eliminate their use 

of Phase I ports. To the extent that 

member organizations do not complete 

the transition during the Transition 

Period, the Exchange will offer member 

organizations the ability to choose to 

continue using Phase I ports until July 

2021. 

The proposed changes are not 

otherwise intended to address any other 

issues, and the Exchange is not aware of 

any problems that member 

organizations would have in complying 

with the proposed change. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,14 in general, and 

furthers the objectives of Sections 

6(b)(4) and 6(b)(5) of the Act,15 in 

particular, because it provides for the 

equitable allocation of reasonable dues, 

fees, and other charges among its 

members, issuers and other persons 

using its facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The Proposed Changes Are Reasonable 

The Exchange operates in a highly 

competitive market. 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.’’ 16

While Regulation NMS has enhanced 

competition, it has also fostered a 

‘‘fragmented’’ market structure where 

trading in a single stock can occur 

across multiple trading centers. When 

multiple trading centers compete for 

order flow in the same stock, the 

Commission has recognized that ‘‘such 

competition can lead to the 

fragmentation of order flow in that 

stock.’’ 17 Indeed, equity trading is 

currently dispersed across 16 

exchanges,18 31 alternative trading 

systems,19 and numerous broker-dealer 

internalizers and wholesalers. Based on 

publicly-available information, no 

single exchange has more than 16% of 

the market share of executed volume of 

equity trades (whether excluding or 

including auction volume).20 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 or reduce use of certain 

categories of products, including ports, 

in response to fee changes. Accordingly, 

the Exchange’s fees, including port fees, 

are reasonably constrained by 

competitive alternatives and market 

participants can readily trade on 

competing venues if they deem pricing 

levels at those other venues to be more 

favorable. 

If a particular exchange charges 

excessive fees for connectivity, 

impacted members and non-members 

may opt to terminate their connectivity 

arrangements with that exchange, and 

adopt a possible range of alternative 

strategies, including routing to the 

applicable exchange through another 

participant or market center or taking 

that exchange’s data indirectly. 

Accordingly, if the Exchange charges 

excessive fees, it would stand to lose not 

only connectivity revenues but also 

revenues associated with the execution 

of orders routed to it, and, to the extent 

applicable, market data revenues. The 

Exchange believes that this competitive 

dynamic imposes powerful restraints on 

the ability of any exchange to charge 

unreasonable fees for connectivity. 

Given this competitive environment, 

the proposal represents a fair and 

reasonable attempt to provide member 

organizations with additional time to 

make an orderly transition to upgraded 

technology without increasing their 

costs. As noted, as of November 2020, 

33% of legacy ports have not been 

cancelled. If a member organization is 

unable to complete this transition 

within the additional time of the 

extended Transition Period, the pricing 

is designed so that only those few 

member organizations that may not 

transition within that time period would 

pay for the Exchange to continue to 

support their Phase I ports. 

The Proposal is an Equitable Allocation 

of Fees 

The Exchange believes its proposal 

equitably allocates its fees among its 

market participants. The Exchange is 

not proposing to adjust the amount of 

the port fees or the fees charged fees to 

offset the Exchange’s continuing costs of 

supporting legacy ports, which will 

remain at the current level for all market 

participants. Rather, the proposal would 

provide additional time for member 

organizations to transition from older to 

newer and more efficient Pillar 

technology and would charge the same 

fee for those few member organizations 

that choose not to transition to Phase II 

ports during the extended Transition 

Period. 

The Exchange believes that the 

proposal to pro-rate port fees beginning 

March 1, 2021, is also an equitable 

allocation of fees since it would apply 

equally to all member organizations that 

connect to the Exchange, who would 

equally receive the benefit of being 

charged only for the connectivity 

utilized during any trading month 

beginning in March 2021. As noted 

above, to the extent a member 

organization continues to use ports 

activated before July 1, 2019 to connect 

to the Exchange during the new March 

1, 2021 date and any subsequent 

months, the Exchange believes it is fair 

and equitable to continue to charge flat 

fees for such ports until such time that 

connection to the Exchange through the 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Notices 82535 

21 15 U.S.C. 78f(b)(8). 

22See Cboe Global Markets U.S. Equities Market 

Volume Summary, available at http://

markets.cboe.com/us/equities/market_share/. 

use of Phase I ports is no longer 

available beginning July 1, 2021. 

The proposal constitutes an equitable 

allocation of fees because all similarly 

situated member organizations and 

other market participants that choose to 

connect to the Exchange through the use 

of Phase I ports during the 

Decommission Period would continue 

to be charged the same, unchanged 

Decommission Extension Fee. 

Moreover, as noted above, the Exchange 

proposes a longer transition period 

which the Exchange expects should be 

more than sufficient for all member 

organizations, regardless of size, to 

transition to Phase II ports before the 

Decommission Fee goes into effect. 

The Proposal is Not Unfairly 

Discriminatory 

The Exchange believes that the 

proposal is not unfairly discriminatory. 

In the prevailing competitive 

environment, member organizations are 

free to disfavor the Exchange’s pricing if 

they believe that alternatives offer them 

better value, and are free to discontinue 

to connect to the Exchange through its 

ports. As noted, the Exchange is offering 

upgraded connections in an effort to 

keep pace with changes in the industry 

and evolving customer needs as new 

technologies emerge and products 

continue to develop and change. 

The proposal neither targets nor will 

it have a disparate impact on any 

particular category of market 

participant. The Exchange believes that 

the proposal does not permit unfair 

discrimination because the proposal 

would be applied to all similarly 

situated member organizations and 

other market participants would be 

charged the same rates, which will 

remain unchanged. 

The Exchange believes that the 

proposal does not permit unfair 

discrimination because the Exchange 

will be making available both the Phase 

I and Phase II ports available to all 

member organizations during the 

extended Transition Period on an equal 

basis. Accordingly, no member 

organization already operating on the 

Exchange would be disadvantaged by 

this allocation of fees. For the same 

reasons, the Exchange believes that the 

proposal would not permit unfair 

discrimination between member 

organizations. 

Similarly, the Decommission 

Extension Fee would apply equally to 

all member organizations that choose to 

connect to the Exchange through the use 

of such ports during the proposed 

Decommission Period. If a member 

organizations becomes subject to the 

Decommission Fee, it would only be 

because such firm chose not to complete 

its transition to the Phase II ports by the 

end of the proposed Transition Period. 

While the Exchange cannot predict with 

certainty whether any firms would be 

subject to the Decommission Fee, and if 

so, which ones, the Exchange 

anticipates that it would be a limited set 

of member organizations that would 

incur such fees. 

The Exchange believes that the 

proposal to pro-rate port fees does not 

permit unfair discrimination because it 

would apply equally to all member 

organizations that connect to the 

Exchange, who would equally receive 

the benefit of being charged only for the 

connectivity utilized during any trading 

month beginning February 1, 2021. As 

noted, to the extent a member 

organization continues to use ports 

activated before July 1, 2019 to connect 

to the Exchange during March 2021 and 

any subsequent months, the Exchange 

believes it is fair, equitable and not 

unfairly discriminatory to continue to 

charge flat fees for such ports until such 

time that connection to the Exchange 

through the use of old ports is no longer 

available beginning July 1, 2021. 

Finally, the Exchange believes that it 

is subject to significant competitive 

forces, as described below in the 

Exchange’s statement regarding the 

burden on competition. 

For the foregoing reasons, the 

Exchange believes that the proposal is 

consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act,21 the Exchange believes that the 

proposed rule change would not impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Instead, as 

discussed above, the Exchange believes 

that the proposed changes would 

provide additional time for member 

organizations to transition from older to 

newer and more efficient Pillar 

technology with no fee increase and 

offset the Exchange’s continuing costs of 

supporting the Phase I ports for the few 

firms that do not transition to the new 

ports during the longer transition period 

without any change to the fees currently 

charged by the Exchange for the use of 

ports to connect to the Exchange’s 

trading systems. 

Intramarket Competition. The 

Exchange does not believe the proposed 

rule change would impose any burden 

on intramarket competition that is not 

necessary or appropriate because it 

would apply to all member 

organizations equally that connect to the 

Exchange. All member organizations, 

regardless of size, will be eligible for the 

transition pricing through the extended 

Transition Period ending February 2021 

and will be eligible to connect via either 

Phase I or Phase II ports during this 

period. In addition, all member 

organizations will be subject to the 

Decommission Fee on an equal basis if 

they do complete the transition to Phase 

II ports by the end of the new February 

2021 date. As noted, the Exchange 

anticipates that a low percentage of 

member organizations would be subject 

to the proposed Decommission Fee, and 

the firms likely to be subject to such fee 

would be larger firms that could more 

easily absorb the cost of that fee. The 

Exchange further believes that by 

extending the Transition Period, all 

member organizations have an equal 

opportunity to timely transition to 

Phase II ports before the Decommission 

Fee would take effect. 

Intermarket Competition. The 

Exchange does not believe the proposed 

rule change would impose any burden 

on intermarket competition that is not 

necessary or appropriate because the 

Exchange operates in a highly 

competitive market in which market 

participants can readily choose to send 

their orders to other exchange and offexchange venues if they deem fee levels 

at those other venues to be more 

favorable. The Exchange believes that 

fees for connectivity are constrained by 

the robust competition for order flow 

among exchanges and non-exchange 

markets. 

As noted, the no single exchange has 

more than 16% of the market share of 

executed volume of equity trades 

(whether excluding or including auction 

volume).22 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 or 

reduce use of certain categories of 

products, including ports, in response to 

fee changes. Accordingly, the 

Exchange’s fees, including port fees, are 

reasonably constrained by competitive 

alternatives and market participants can 

readily trade on competing venues if 

they deem pricing levels at those other 

venues to be more favorable. 

The Exchange is proposing these 

changes in the context of a competitive 

environment in which market 

participants can and do shift order flow, 

or discontinue or reduce use of certain 

categories of products, in response to fee 


khammond on DSKJM1Z7X2PROD with NOTICES
82536 Federal Register / Vol. 85, No. 244 / Friday, December 18, 2020 / Notices 

23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b-4(f)(2). 

25 15 U.S.C. 78s(b)(2)(B). 26 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. 89901 

(Sept. 17, 2020), 85 FR 59836 (‘‘Notice’’). 

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

5See Securities Exchange Act Release No. 90292, 

85 FR 70678 (Nov. 5, 2020). The Commission 

designated December 22, 2020, as the date by which 

the Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

disapprove, the proposed rule change. 

6 15 U.S.C. 78s(b)(2)(B). 

7The Trust has filed a registration statement on 

Form S–1 under the Securities Act of 1933, dated 

August 26, 2020 (File No.333–248430) 

(‘‘Registration Statement’’). The Fund will not trade 

on the Exchange until the Registration Statement is 

effective. 

changes. Because ports are used by 

member organizations to trade 

electronically on the Exchange, fees 

associated with ports are subject to 

these same competitive forces. The 

Exchange therefore believes that the 

proposal would not impose an undue 

burden on intermarket competition 

because the purpose of this filing is not 

to change the rates charged for ports or 

to offset the Exchange’s continuing costs 

of supporting legacy ports but rather to 

provide member organizations with 

more time to effect an orderly transition 

to upgraded technology without needing 

to incur any additional costs. 

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) 23 of the Act and 

subparagraph (f)(2) of Rule 19b-4 24

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) 25 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– 

NYSE–2020–99 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–NYSE–2020–99. 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–NYSE–2020–99, and 

should be submitted on or before 

January 8, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2020–27842 Filed 12–17–20; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90659; File No. SRCboeBZX–2020–070] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Order Instituting 

Proceedings to Determine Whether to 

Approve or Disapprove a Proposed 

Rule Change to List and Trade Shares 

of the –1x Short VIX Futures ETF, a 

Series of VS Trust, Under Rule 

14.11(f)(4) (‘‘Trust Issued Receipts’’) 

December 14, 2020. 

I. Introduction 

On September 4, 2020, Cboe BZX 

Exchange, Inc. (‘‘Exchange’’ or ‘‘BZX’’) 

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 list and trade shares 

(‘‘Shares’’) of the –1x Short VIX Futures 

ETF (‘‘Fund’’), a series of VS Trust 

(‘‘Trust’’), under BZX Rule 14.11(f)(4) 

(Trust Issued Receipts). The proposed 

rule change was published for comment 

in the Federal Register on September 

23, 2020.3 On October 30, 2020, 

pursuant to Section 19(b)(2) of the Act,4

the Commission designated a longer 

period within which to approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether to 

disapprove the proposed rule change.5

The Commission has received no 

comments on the proposed rule change. 

The Commission is publishing this 

order to solicit comments on the 

proposed rule change from interested 

persons and to institute proceedings 

pursuant to Section 19(b)(2)(B) of the 

Act 6 to determine whether to approve 

or disapprove the proposed rule change. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to list and 

trade Shares of the Fund 7 under BZX 


khammond on DSKJM1Z7X2PROD with NOTICES