6700 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 

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

2 17 CFR 240.19b–4. 

3The term ‘‘Lead Market Maker’’ or (‘‘LMM’’) 

applies to a registered BX Options Market Maker 

that is approved pursuant to Options 2, Section 3 

to be the LMM in an options class (options classes). 

4The term ‘‘BX Options Market Maker’’ or (‘‘M’’) 

is a Participant that has registered as a Market 

Maker on BX Options pursuant to Options 2, 

Section 1, and must also remain in good standing 

pursuant to Options 2, Section 9. In order to receive 

Market Maker pricing in all securities, the 

Participant must be registered as a BX Options 

Market Maker in at least one security. 

5See Options 3, Section 8. 

6A Non-Customer includes a Professional, 

Broker-Dealer and Non-BX Options Market Maker. 

7The term ‘‘Firm’’ or (‘‘F’’) applies to any 

transaction that is identified by a Participant for 

clearing in the Firm range at OCC. 

8See Options 7, Section 2(1), note 2. 

9The term ‘‘Customer’’ or (‘‘C’’) applies to any 

transaction that is identified by a Participant for 

clearing in the Customer range at The Options 

Clearing Corporation (‘‘OCC’’) which is not for the 

account of broker or dealer or for the account of a 

‘‘Professional’’ (as that term is defined in Options 

1, Section 1(a)(48)). 

[FR Doc. 2021–01341 Filed 1–21–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90936; File No. SR–BX– 

2021–001] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend the BX 

Options Pricing Schedule 

January 15, 2021. 

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 January 4, 

2021, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘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 

The Exchange proposes to amend the 

BX Options Pricing Schedule at Options 

7. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/rules, 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 

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 

Today, Lead Market Makers 

(‘‘LMMs’’) 3 are assessed the same fees 

and rebates in Options 7, Section 2 as 

BX Options Market Makers.4 The 

purpose of the proposed rule change is 

to amend Options 7, Section 2 to (i) 

increase the LMM Rebate to Add 

Liquidity, (ii) decrease the LMM Fee to 

Add Liquidity, and (iii) restructure the 

existing pricing schedules to add 

separate pricing for LMMs, which will 

apply in each case to LMMs in their 

specifically appointed options classes. 

As described in detail below, while the 

Exchange is proposing to add separate 

pricing for LMMs in the existing 

schedules, LMMs will continue to be 

assessed the same BX Options Market 

Makers fees and rebates in their 

specifically allocated options classes 

under this proposal except with respect 

to the proposed LMM Rebate to Add 

Liquidity and proposed LMM Fee to 

Add Liquidity. The Exchange also 

proposes to amend its Opening Cross 5

pricing provisions in Options 7, Section 

2(2) to correct an inadvertent omission. 

Lastly, the Exchange proposes various 

technical, non-substantive changes 

throughout Options 7, including to 

update cross-cites to obsolete rules. 

The proposed changes respond in part 

to the current competitive environment 

where market participants have a choice 

of where to direct order flow by 

incentivizing LMMs to increase their 

liquidity provision on the Exchange. 

LMM Rebate To Add Liquidity 

Today, as set forth in Options 7, 

Section 2(1), LMMs are provided the 

$0.10 per contract BX Options Market 

Maker Rebate to Add Liquidity in Penny 

Symbols in their specifically allocated 

options classes. This rebate is provided 

only when the LMM is contra to a NonCustomer,6 Firm,7 or BX Options Market 

Maker (including LMMs).8

The Exchange now proposes to 

increase this rebate to $0.11 per contract 

for LMMs only. This rebate will apply 

to LMMs in their specifically allocated 

options classes, and will have the same 

qualifications as the existing BX 

Options Market Maker rebate in that the 

incentive will only be provided to 

LMMs that are contra to Non-Customers, 

Firms, BX Options Market Makers, or 

LMMs. To effect this change, the 

Exchange proposes to set forth the LMM 

Rebate to Add Liquidity in Penny 

Symbols in a separate pricing column in 

Options 7, Section 2(1). The Exchange 

will also amend the rebate qualifications 

in note 2 of Options 7, Section 2(1) to 

include LMMs. As amended, note 2 will 

provide that the Rebate to Add Liquidity 

will be paid to a BX Options Market 

Maker or a Lead Market Maker only 

when the BX Options Market Maker or 

Lead Market Maker is contra to a NonCustomer, Firm, BX Options Market 

Maker, or Lead Market Maker. 

LMM Fee To Add Liquidity 

Today, as set forth in Options 7, 

Section 2(1), LMMs are charged the 

$0.39 per contract BX Options Market 

Maker Fee to Add Liquidity in Penny 

Symbols in their specifically allocated 

options classes. Pursuant to note 3 of 

Options 7, Section 2(1), this fee is 

assessed only when the LMM is contra 

to a Customer.9

The Exchange now proposes to 

decrease this fee to $0.38 per contract 

for LMMs only. This fee will apply to 

LMMs in their specifically allocated 

options classes, and will have the same 

qualifications as the existing BX 

Options Market Maker fee in that the fee 

only will be assessed to LMMs that are 

contra to Customers. To effect this 

change, the Exchange proposes to set 

forth the LMM Fee to Add Liquidity in 

Penny Symbols in a separate pricing 

column in Options 7, Section 2(1). The 

Exchange will also amend the fee 

qualifications in note 3 of Options 7, 

Section 2(1) to include LMMs. As 

amended, note 3 will provide that the 

Fee to Add Liquidity will be assessed to 

a BX Options Market Maker or a Lead 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 6701 

Market Maker only when the BX 

Options Market Maker or Lead Market 

Maker is contra to a Customer. 

Separate LMM Pricing 

The Exchange also proposes to 

restructure the existing pricing 

schedules to add separate pricing for 

LMMs. As noted above, while the 

Exchange is proposing to add separate 

pricing for LMMs, LMMs will continue 

to be assessed the same BX Options 

Market Makers fees and rebates in their 

specifically allocated options classes 

under this proposal except with respect 

to the new LMM Rebate to Add 

Liquidity and new LMM Fee to Add 

Liquidity discussed above. 

To effect this change, the Exchange 

first proposes to amend the fees and 

rebates for Penny and Non-Penny 

Symbols in Options 7, Section 2(1) by 

adding a separate column for LMM 

pricing. In the Penny Symbol and NonPenny Symbol Tier Schedules within 

Options 7, Section 2(1), the Exchange 

also proposes to add LMMs next to each 

instance of BX Options Market Maker. 

The Exchange will make similar 

changes to note 4 of Options 7, Section 

2(1) to add ‘‘or a Lead Market Maker’’ 

after each instance of BX Options 

Market Maker. As amended, the pricing 

schedules and accompanying notes for 

Penny and Non-Penny Symbols will be 

as follows: 

FEES AND REBATES

[Per executed contract] 

Customer Lead market 

maker 

BX options 

market maker 

Noncustomer 1 Firm 

Penny Symbols: 

Rebate to Add Liquidity ................................................ # 2 $0.11 2 $0.10 N/A N/A 

Fee to Add Liquidity ............................................................. # 3 0.38 3 0.39 0.45 0.45 

Rebate to Remove Liquidity ................................................ # N/A N/A N/A N/A 

Fee to Remove Liquidity ...................................................... N/A # # 0.46 0.46 

Non-Penny Symbols: ........................................................... ........................ ........................ ........................ ........................ ........................

Rebate to Add Liquidity ....................................................... * N/A N/A N/A N/A 

Fee to Add Liquidity ............................................................. * 4 0.50/0.95 4 0.50/0.95 0.98 0.98 

Rebate to Remove Liquidity ................................................ * N/A N/A N/A N/A 

Fee to Remove Liquidity ...................................................... N/A * * 0.89 0.89 

1A Non-Customer includes a Professional, Broker-Dealer and Non-BX Options Market Maker. 

2The Rebate to Add Liquidity will be paid to a BX Options Market Maker or a Lead Market Maker only when the BX Options Market Maker or 

Lead Market Maker is contra to a Non-Customer, Firm, BX Options Market Maker, or Lead Market Maker. 3The Fee to Add Liquidity will be assessed to a BX Options Market Maker or a Lead Market Maker only when the BX Options Market Maker 

or Lead Market Maker is contra to a Customer. 4The higher Fee to Add Liquidity will be assessed to a BX Options Market Maker or a Lead Market Maker only when the BX Options Market 

Maker or Lead Market Maker is contra to a Customer. #Penny Symbols Tier Schedule 

When: Rebate to add 

liquidity 

Fee to add 

liquidity 

Rebate to remove 

liquidity 

Fee to remove 

liquidity 

Fee to remove 

liquidity 

Trading with: 

Customer Customer Customer Lead market 

maker or BX 

options market 

maker 

Lead market 

maker or BX 

options market 

maker Non-customer, 

lead market 

maker, BX options 

market maker, or 

firm 

Customer 

Non-customer, 

lead market 

maker, BX options 

market maker, 

customer, or firm Customer 

Non-customer, 

lead market 

maker, BX options 

market maker, or 

firm 

Tier 1: Participant executes less than 

0.05% of total industry customer equity and ETF option ADV contracts 

per month ........................................... $0.00 $0.39 $0.00 $0.39 $0.46 

Tier 2: Participant executes 0.05% to 

less than 0.15% of total industry customer equity and ETF option ADV 

contracts per month ........................... 0.10 0.39 0.25 0.39 0.46 

Tier 3: Participant executes 0.15% or 

more of total industry customer equity 

and ETF option ADV contracts per 

month ................................................. 0.20 0.39 0.35 0.30 0.46 

* Non-Penny Symbols Tier Schedule 

Tier 1: Participant executes less than 

0.05% of total industry customer equity and ETF option ADV contracts 

per month ........................................... 0.00 0.85 0.80 0.89 0.89 

Tier 2: Participant executes 0.05% to 

less than 0.15% of total industry customer equity and ETF option ADV .....

contracts per month ............................... 0.10 0.85 0.80 0.89 0.89 


jbell on DSKJLSW7X2PROD with NOTICES
6702 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 

10See Options 5, Section 4. 

11See Options 3, Section 13. 

12See Securities Exchange Act Release No. 67339 

(July 3, 2012), 77 FR 40688 (July 10, 2012) (SR–BX– 

2012–043). 

When: Rebate to add 

liquidity 

Fee to add 

liquidity 

Rebate to remove 

liquidity 

Fee to remove 

liquidity 

Fee to remove 

liquidity 

Trading with: 

Customer Customer Customer Lead market 

maker or BX 

options market 

maker 

Lead market 

maker or BX 

options market 

maker Non-customer, 

lead market 

maker, BX options 

market maker, or 

firm 

Customer 

Non-customer, 

lead market 

maker, BX options 

market maker, 

customer, or firm Customer 

Non-customer, 

lead market 

maker, BX options 

market maker, or 

firm 

Tier 3: Participant executes 0.15% or 

more of total industry customer equity 

and ETF option ADV contracts per 

month ................................................. 0.20 0.85 0.80 0.60 0.89 

As shown above, the only fee changes 

relate to the proposed LMM Rebate to 

Add Liquidity in Penny Symbols and 

the proposed LMM Fee to Add Liquidity 

in Penny Symbols. Otherwise, LMMs 

will continue to be charged at the same 

rate for Penny and Non-Penny Symbols 

under this proposal (i.e., the same as BX 

Options Market Makers). 

The Exchange also proposes to make 

similar changes in Options 7, Section 

2(4) and Section 2(5) to add separate 

pricing for LMMs. In Section 2(4), 

which sets forth pricing for orders 

executed in the Exchange’s exposure 

mechanism,10 the Exchange proposes to 

add a separate pricing column for LMMs 

that will set forth the same fees and 

rebates that LMMs are assessed today 

(i.e., the same as BX Options Market 

Makers). As amended, the pricing 

schedule for exposure orders in Section 

2(4) will be as follows: 

FEES AND REBATES

[Per executed contract] 

Customer Lead market 

maker 

BX options 

market maker Non-customer 

Penny Symbols: 

Rebate for Order triggering order exposure alert ..................................... $0.34 $0.00 $0.00 $0.00 

Fee for Order responding to order exposure alert ................................... 0.39 0.39 0.39 0.45 

Non-Penny Symbols ................................................................................. ........................ ........................ ........................ ........................

Rebate for Order triggering order exposure alert ..................................... 0.70 0.00 0.00 0.00 

Fee for Order responding to order exposure alert ................................... 0.85 0.85 0.85 0.89 

In Section 2(5), which sets forth 

pricing for orders executed in the 

Exchange’s Price Improvement 

Mechanism (‘‘PRISM’’),11 the Exchange 

proposes to add a separate pricing row 

for LMMs that will set forth the same 

fees and rebates that LMMs are assessed 

today (i.e., the same as BX Options 

Market Makers). As amended, the 

pricing schedule for PRISM orders in 

Section 2(5) will be as follows: 

FEES AND REBATES

[Per contact] 

Type of market participants Agency order 

Submitted 

PRISM order 

Responded to PRISM auction PRISM order traded with 

PRISM response 

Fee 

Fee 

Rebate 

Contra-side 

order 

Penny classes Non-penny 

classes Penny classes Non-penny 

classes 

Customer .................................................. $0.00 $0.00 $0.49 $0.94 $0.35 $0.70 

Lead Market Maker .................................. 0.30 0.05 0.49 0.94 0.00 0.00 

BX Options Market Maker ....................... 0.30 0.05 0.49 0.94 0.00 0.00 

Non-Customer .......................................... 0.30 0.05 0.49 0.94 0.00 0.00 

Opening Cross 

The Exchange proposes to amend its 

Opening Cross pricing provisions in 

Options 7, Section 2(2) to correct an 

inadvertent omission. Specifically, the 

Exchange submitted a rule filing 

effective on July 3, 2012 to adopt fees 

and rebates for BX Options, which, 

among other things, adopted the pricing 

for market participants during the 

Opening Cross (‘‘2012 Filing’’).12 As 

discussed in the 2012 Filing, BX’s 


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 6703 

13See NOM Options 7, Section 2(2) (emphasis 

added). 

14 In particular, the Exchange will update obsolete 

cross-cites in the definitions of ‘‘Customer,’’ ‘‘BX 

Options Market Maker,’’ ‘‘Lead Market Maker,’’ 

‘‘Professional,’’ and ‘‘Joint Back Office.’’ Similarly, 

the Exchange will also update the obsolete crosscite in current Section 1 (Collection of Exchange 

Fees and Other Claims-BX Options). 

15See Securities Exchange Act Release No. 84326 

(October 1, 2018), 83 FR 50414 (October 5, 2018) 

(SR–BX–2018–046). 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(4) and (5). 

18NetCoalition v. SEC, 615 F.3d 525, 539 (DC Cir. 

2010) (quoting Securities Exchange Act Release No. 

59039 (December 2, 2008), 73 FR 74770, 74782–83 

(December 9, 2008) (SR–NYSEArca–2006–21)). 

19Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005) 

(‘‘Regulation NMS Adopting Release’’). 

20See, e.g., NYSE Arca Options Fees and Charges, 

Trade-Related Charges for Standard Options. 

Opening Cross pricing was intended to 

be similar to the Opening Cross pricing 

on its affiliate, The Nasdaq Options 

Market (‘‘NOM’’), in that BX would 

similarly assess a Fee to Remove 

Liquidity on all market participants, 

other than a Customer, during the 

Opening Cross. Indeed, NOM’s Pricing 

Schedule specifically states that 

‘‘Broker-Dealers, Professionals, Firms, 

Non-NOM Market Makers and NOM 

Market Makers will be assessed the Fee 

for Removing Liquidity during the 

Exchange’s Opening Cross.’’ 13

Accordingly, the 2012 Filing should 

have likewise reflected that BX Options 

Market Makers would be assessed the 

Fee to Remove Liquidity during the 

Exchange’s Opening Cross. However, 

the 2012 Filing inadvertently omitted 

these market participants in the Exhibit 

5 rule text. As a result of this drafting 

error, the current rule in Options 7, 

Section 2(2) incorrectly indicates that 

only Professionals, Firms, BrokerDealers and Non-BX Options Market 

Makers will be assessed the Fee to 

Remove Liquidity during the Opening 

Cross. Therefore, the Exchange proposes 

to add that BX Options Market Makers 

will be assessed the Fee to Remove 

Liquidity during the Exchange’s 

Opening Cross. The Exchange notes that 

this change is corrective in nature and 

does not change any rates that are 

currently applied to BX Options Market 

Makers during the Opening Cross. 

The Exchange also proposes a nonsubstantive change in this section to 

replace Professionals, Broker-Dealers, 

and Non-BX Options Market Makers 

with the term ‘‘Non-Customers,’’ which 

encompasses those market participant 

types. Finally, in light of the proposed 

changes to separately provide for LMM 

pricing throughout Options 7, Section 2 

by adding LMMs next to each instance 

of BX Options Market Makers, the 

Exchange proposes to add LMMs to the 

Opening Cross pricing provisions in 

Section 2(2). As discussed above, LMMs 

are currently charged the same rates as 

BX Options Market Makers, including 

during the Opening Cross (i.e., the Fee 

to Remove Liquidity), and the Exchange 

is not proposing to amend the current 

rates applied to LMMs during the 

Opening Cross. With the proposed 

changes, the last sentence of Options 7, 

Section 2(2) will now provide: ‘‘Lead 

Market Makers, BX Options Market 

Makers, Non-Customers, and Firms will 

be assessed the Fee to Remove Liquidity 

during the Exchange’s Opening Cross.’’ 

Technical Changes 

The Exchange proposes a number of 

technical, non-substantive changes in 

Options 7. The Exchange first proposes 

to add ‘‘Section 1 General Provisions’’ at 

the beginning of the Pricing Schedule. 

The Exchange will also remove ‘‘Section 

1’’ before the title ‘‘Collection of 

Exchange Fees and Other Claims-BX 

Options’’ and incorporate those 

provisions within the new Section 1, 

which will include other provisions 

such as the Pricing Schedule 

definitions. This change will assist 

Participants when citing to these 

defined terms, which currently has no 

section reference. 

The Exchange also proposes to update 

obsolete rule citations within proposed 

Section 1 to reflect the current rules.14

The Exchange previously relocated the 

Rulebook and certain cross-cites were 

not updated.15

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,16 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,17 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange’s proposed changes to 

its schedule of credits are reasonable in 

several respects. As a threshold matter, 

the Exchange is subject to significant 

competitive forces in the market for 

options securities transaction services 

that constrain its pricing determinations 

in that market. The fact that this market 

is competitive has 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’. . . .’’ 18

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, 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.’’ 19

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for options 

security transaction services. The 

Exchange is only one of sixteen options 

exchanges to which market participants 

may direct their order flow. Competing 

options exchanges offer similar pricing 

structures to that of the Exchange, 

including schedules of rebates and fees 

that differentiate between LMMs and 

other market participants.20

Within this environment, market 

participants can freely and often do shift 

their order flow among the Exchange 

and competing venues in response to 

changes in their respective pricing 

schedules. As such, the proposal 

represents a reasonable attempt by the 

Exchange to increase its liquidity and 

market share relative to its competitors. 

LMM Rebate To Add Liquidity 

The Exchange believes that the 

proposed LMM Rebate to Add Liquidity 

in Penny Symbols is reasonable, 

equitable, and not unfairly 

discriminatory. The proposal will offer 

a higher $0.11 per contract rebate to 

qualifying LMMs in their specifically 

allocated options classes along the same 

lines as the existing $0.10 per contract 

BX Options Market Maker Rebate to 

Add Liquidity in Penny Symbols (i.e., 

only if the order is contra to NonCustomers, Firms, BX Options Market 

Makers, or LMMs). The Exchange 


jbell on DSKJLSW7X2PROD with NOTICES
6704 Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 

21See Options 2, Section 4(j) (setting forth the 

90% or higher quoting requirements for LMMs) and 

Section 5(d) (setting forth the 60% or higher 

quoting obligations for BX Options Market Makers). 

22 Id. 23See supra note 20. 

believes that the proposed rebate will 

incentivize LMMs to increase their 

liquidity provision on the Exchange, 

which will ultimately benefit all market 

participants through the quality of order 

interaction. 

The Exchange further believes that the 

proposed differentiation between LMMs 

and other market participants through 

the higher $0.11 per contract Rebate to 

Add Liquidity recognizes the differing 

contributions made to the liquidity and 

trading environment on the Exchange by 

LMMs through their quoting obligations 

and their commitment of capital, unlike 

other market participants. In addition, 

LMMs are subject to heightened quoting 

obligations compared to BX Options 

Market Makers.21 Accordingly, the 

Exchange believes that offering a higher 

rebate to LMMs is equitable and not 

unfairly discriminatory. 

LMM Fee To Add Liquidity 

The Exchange believes that the 

proposed LMM Fee to Add Liquidity in 

Penny Symbols is reasonable, equitable 

and not unfairly discriminatory. The 

proposal will assess a lower $0.38 per 

contract fee to LMMs in their 

specifically allocated options classes 

along the same lines as the existing 

$0.39 per contract BX Options Market 

Maker Fee to Add Liquidity in Penny 

Symbols (i.e., only if the order is contra 

to Customers). The Exchange believes 

that the proposed fee remains 

competitive and will continue to attract 

order flow to BX to the benefit of all 

market participants. As described above, 

the proposed fee is lower than the 

current fee assessed to LMMs when 

trading against a Customer. The 

Exchange believes that the lower fee 

will incentivize LMMs to increase their 

liquidity provision on the Exchange, 

which will ultimately benefit all market 

participants through the quality of order 

interaction. 

The Exchange further believes that the 

proposed differentiation between LMMs 

and other market participants through 

the lower $0.38 per contract Fee to Add 

Liquidity recognizes the differing 

contributions made to the liquidity and 

trading environment on the Exchange by 

LMMs through their quoting obligations 

and their commitment of capital, unlike 

other market participants. In addition, 

LMMs are subject to heightened quoting 

obligations compared to BX Options 

Market Makers.22 Accordingly, the 

Exchange believes that offering a lower 

fee to LMMs is equitable and not 

unfairly discriminatory. 

Separate LMM Pricing 

The Exchange believes that its 

proposal to restructure the pricing 

schedules in Options 7, Section 2 to add 

separate pricing for LMMs is reasonable, 

equitable, and not unfairly 

discriminatory. While the Exchange is 

proposing to add separate pricing for 

LMMs, LMMs will continue to be 

assessed the same BX Options Market 

Makers fees and rebates in their 

specifically allocated options classes 

under this proposal except with respect 

to the higher LMM Rebate to Add 

Liquidity in Penny Symbols and lower 

LMM Fee to Add Liquidity in Penny 

Symbols, as discussed above. The 

Exchange believes that separately 

providing for LMMs throughout the 

pricing schedules in Options 7, Section 

2 will provide greater clarity and 

transparency as to what fees and rebates 

are assessed to this type of market 

participant. 

Opening Cross 

The Exchange believes that the 

proposed changes to the Opening Cross 

pricing provisions in Options 7, Section 

2(2) is reasonable, equitable, and not 

unfairly discriminatory as it does not 

change the pricing currently assessed by 

the Exchange during the Opening Cross, 

but rather corrects an inadvertent 

omission by the 2012 Filing to include 

BX Options Market Makers within 

Options 7, Section 2(2). As discussed 

above, the Exchange intended to follow 

the Opening Cross pricing on NOM such 

that BX would similarly assess a Fee to 

Remove Liquidity on all market 

participants, other than a Customer, 

during the Opening Cross. The 

Exchange believes that the proposed 

correction to add BX Options Market 

Makers will help ensure that the Pricing 

Schedule more accurately represents the 

rates assessed currently during the 

Opening Cross and in the manner as 

originally intended by the 2012 Filing, 

thereby avoiding any potential 

confusion among market participants. 

The Exchange again notes that this 

proposed change is merely corrective in 

nature and does not change any rates 

that are currently applied during the 

Opening Cross. 

The proposed changes to add LMMs 

to the Opening Cross pricing provisions 

likewise do not change any rates that are 

currently applied to market participants 

during the Opening Cross. LMMs will 

continue to be assessed the same rates 

as BX Options Market Makers, including 

during the Opening Cross (i.e., the Fee 

to Remove Liquidity). Lastly, the 

proposed change to replace 

Professionals, Broker-Dealers, and NonBX Options Market Makers with the 

term ‘‘Non-Customers,’’ which 

encompasses those market participant 

types, is non-substantive in nature. 

Accordingly, the Exchange believes that 

foregoing modifications are reasonable, 

equitable, and not unfairly 

discriminatory. 

Technical Changes 

The Exchange believes that the 

proposed technical changes described 

above are reasonable, equitable, and not 

unfairly discriminatory as they are all 

non-substantive changes intended to 

promote greater clarity and transparency 

to the Exchange’s Pricing Schedule. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. In terms of 

intra-market competition, the proposed 

pricing changes are designed to attract 

additional order flow to the Exchange. 

The Exchange believes that the 

proposed higher LMM Rebate to Add 

Liquidity and lower LMM Fee to Add 

Liquidity will continue to incentivize 

LMMs to direct their order flow to the 

Exchange. Greater liquidity benefits all 

market participants on the Exchange by 

providing more trading opportunities 

and encourages LMMs to send orders to 

the Exchange, thereby contributing to 

robust levels of liquidity to the benefit 

of all market participants. 

In terms of inter-market competition, 

the Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

options exchanges. Because competitors 

are free to modify their own fees in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

does not believe that its proposed fee 

change will impose any burden on 

intermarket competition. Furthermore, 

as noted above, competing options 

exchanges offer similar pricing 

structures to that of the Exchange, 

including schedules of rebates and fees 

that differentiate between LMMs and 

other market participants.23


jbell on DSKJLSW7X2PROD with NOTICES
Federal Register / Vol. 86, No. 13 / Friday, January 22, 2021 / Notices 6705 

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

25 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The platform also permits users to submit orders 

for commodity futures, commodity options and 

other non-security products to be sent to designated 

contract markets, futures commission merchants, 

introducing brokers or other applicable destinations 

of the users’ choice. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

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)(ii) of the Act.24

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: (i) Necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

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– 

BX–2021–001 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–BX–2021–001. 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–BX–2021–001 and should 

be submitted on or before February 12, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01403 Filed 1–21–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90929; File No. SR–CBOE– 

2021–002] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating To Amend the 

Silexx Trading Platform Fees Schedule 

January 14, 2021. 

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 January 4, 

2021, 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 Silexx trading platform (‘‘Silexx’’ or 

the ‘‘platform’’) Fees 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://www.cboe.com/ 

AboutCBOE/ 

CBOELegalRegulatoryHome.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 adopt 

‘‘drop copy’’ and order routing fees for 

a recently adopted Silexx platform 

(‘‘Cboe Silexx’’), effective January 4, 

2021. 

By way of background, the Silexx 

platform consists of a ‘‘front-end’’ order 

entry and management trading platform 

(also referred to as the ‘‘Silexx 

terminal’’) for listed stocks and options 

that supports both simple and complex 

orders,3 and a ‘‘back-end’’ platform 

which provides a connection to the 

infrastructure network. From the Silexx 

platform (i.e., the collective front-end 

and back-end platform), a Silexx user 

has the capability to send option orders 

to U.S. options exchanges, send stock 

orders to U.S. stock exchanges (and 

other trading centers), input parameters 

to control the size, timing, and other 

variables of their trades, and also 

includes access to real-time options and 

stock market data, as well as access to 

certain historical data. The Silexx 

platform is designed so that a user may 

enter orders into the platform to send to 


jbell on DSKJLSW7X2PROD with NOTICES