4158 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

11See supra note 7. 

12See supra note 6. 

13 15 U.S.C. 78s(b)(3)(A). 

14 17 CFR 240.19b–4(f)(6). 

15 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

language of other exchanges.11 In 

addition, the proposed billing procedure 

is fair, equitable, and not unfairly 

discriminatory because it will apply 

equally to all Members (and NonMembers that pay Exchange fees). 

The Exchange also believes that 

providing that all fees and rebates are 

final after three months (i.e., resolving 

billing errors only for the three full 

calendar months preceding the month 

in which the Exchange became aware of 

the error), is reasonable as both the 

Exchange and Members and NonMembers have an interest in knowing 

when its fee assessments are final and 

when reliance can be placed on those 

assessments. Indeed, without some 

deadline on billing errors, the Exchange 

and Members and Non-Members would 

never be able to close their books with 

any confidence. Furthermore, as noted 

above, a number of Exchanges similarly 

consider their fees final after a similar 

period of time.12 The proposed change 

is also equitable, and not unfairly 

discriminatory because it will apply 

equally to all Members (and NonMembers that pay Exchange fees) and 

apply in cases where either the Member 

(or Non-Member) discovers the error or 

the Exchange discovers the error. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change would impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. With respect 

to the billing procedure and billing error 

policy, the proposed rule change would 

establish a clear process that would 

apply equally to all Members. 

Additionally, the proposed rule change 

is similar to rules of other exchanges. 

The Exchange does not believe such 

proposed changes would impair the 

ability of Members or competing order 

execution venues to maintain their 

competitive standing in the financial 

markets. Moreover, because the 

proposed changes would apply equally 

to all Members, the proposal does not 

impose any burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No comments were solicited or 

received on the proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 13 and Rule 19b– 

4(f)(6) 14 thereunder. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

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– 

CboeBYX–2020–034 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–CboeBYX–2020–034. 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; 

the Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR– 

CboeBYX–2020–034 and should be 

submitted on or before February 5, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–00813 Filed 1–14–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90883; File No. SR– 

NASDAQ–2020–100] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Modify the Quorum Requirement for 

Non-U.S. Companies Under Certain 

Limited Circumstances 

January 11, 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 December 

31, 2020, the Nasdaq Stock Market LLC 

(‘‘Nasdaq’’ 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. 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4159 

3Listing Rule 5620(a). 

4For example, Delaware allows companies to 

establish their own quorum requirements in their 

certificates of incorporation or bylaws, provided 

that the quorum must be at least one-third of the 

shares entitled to vote on the matter. In the absence 

of a quorum provision in the company’s certificate 

of incorporation or bylaws, Delaware requires a 

quorum of 50% of the shares entitled to vote on the 

matter. See Del. Code Sec. 216. 

5Ordinary shares of at least one Nasdaq listed 

company DBV Technologies S.A. (DBV), are listed 

on Euronext Paris which is a regulated market 

under French and EU regulations. Accordingly, as 

explained below, DBV cannot amend its bylaws to 

increase the quorum requirement to comply with 

the Nasdaq Quorum Requirement. Since its IPO in 

2014, DBV qualified as a foreign private issuer and 

relied on home country practices in lieu of 

complying with the Nasdaq Quorum Requirement. 

6Available at https://www.legifrance.gouv.fr/ 

affichCodeArticle.do?idArticle=LEGIARTI

000038799445&cidTexte=LEGITEXT00000

5634379&dateTexte=20190721. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to a proposal 

to modify the quorum requirement 

applicable to a non-U.S. company where 

such company’s home country law is in 

direct conflict with Nasdaq’s quorum 

requirement. 

The text of the proposed rule change 

is detailed below: proposed new 

language is italicized and proposed 

deletions are in brackets. 

* * * * * 

The Nasdaq Stock Market Rules 

* * * * * 

5615. Exemptions From Certain 

Corporate Governance Requirements 

This rule provides the exemptions 

from the corporate governance rules 

afforded to certain types of Companies, 

and sets forth the phase-in schedules for 

initial public offerings, Companies 

emerging from bankruptcy, Companies 

transferring from other markets and 

Companies ceasing to be Smaller 

Reporting Companies. This rule also 

describes the applicability of the 

corporate governance rules to 

Controlled Companies and sets forth the 

phase-in schedule afforded to 

Companies ceasing to be Controlled 

Companies. 

(a) Exemptions to the Corporate 

Governance Requirements 

(1)–(3) No change. 

(4) Limited Partnerships 

A limited partnership is not subject to 

the requirements of the Rule 5600 

Series, except as provided in this Rule 

5615(a)(4). A limited partnership may 

request a written interpretation 

pursuant to Rule 5602. 

(A)–(D) No change. 

(E) Quorum 

(i) In the event that a meeting of 

limited partners is required pursuant to 

paragraph (D), the quorum for such 

meeting shall be not less than 331⁄3

percent of the limited partnership 

interests outstanding. 

(ii) Notwithstanding the quorum 

requirements in paragraph (i) above, 

Nasdaq may accept any quorum 

requirement for a non-U.S. Company if 

the Company’s home country law 

mandates such quorum for the 

shareholders’ meeting and prohibits the 

Company from establishing a higher 

quorum required by paragraph (i) above. 

A Company relying on this provision 

shall submit to Nasdaq a written 

statement from an independent counsel 

in such Company’s home country 

describing the home country law that 

conflicts with Nasdaq’s quorum 

requirement and certifying that, as the 

result, the Company is prohibited from 

complying with the quorum 

requirements in paragraph (i) above. 

(F)–(J) No change 

(5)–(6) No change. 

(b)–(c) No change. 

* * * * * 

5620. Meetings of Shareholders 

(a) No change. 

IM–5620. Meetings of Shareholders or 

Partners—No change. 

(b) No change. 

(c) Quorum 

(i) Each Company that is not a limited 

partnership shall provide for a quorum 

as specified in its by-laws for any 

meeting of the holders of common stock; 

provided, however, that in no case shall 

such quorum be less than 331⁄3% of the 

outstanding shares of the Company’s 

common voting stock. Limited 

partnerships that are required to hold an 

annual meeting of partners are subject to 

the requirements of Rule 5615(a)(4)(E). 

(ii) Notwithstanding the quorum 

requirements in paragraph (i) above, 

Nasdaq may accept any quorum 

requirement for a non-U.S. Company if 

the Company’s home country law 

mandates such quorum for the 

shareholders’ meeting and prohibits the 

Company from establishing a higher 

quorum required by paragraph (i) above. 

A Company relying on this provision 

shall submit to Nasdaq a written 

statement from an independent counsel 

in such Company’s home country 

describing the home country law that 

conflicts with Nasdaq’s quorum 

requirement and certifying that, as the 

result, the Company is prohibited from 

complying with the quorum 

requirements in paragraph (i) above. 

* * * * * 

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 discused 

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 

Nasdaq is proposing to modify Listing 

Rules 5620(c) and 5615(a)(4)(E) (the 

‘‘Quorum Rules’’) to allow Nasdaq to 

accept a quorum less than 33 1⁄3% of the 

outstanding shares of a company’s 

common voting stock where the 

company is incorporated outside of the 

U.S. and such company’s home country 

law prohibits the company from 

establishing a quorum that satisfies the 

Quorum Rules. 

Listing Rule 5620(c) establishes 

quorum requirements for an annual 

meeting of shareholders for Nasdaq 

companies listing common stock or 

voting preferred stock, and their 

equivalents.3 Under this rule, each 

company that is not a limited 

partnership must provide for a quorum 

as specified in its by-laws for any 

meeting of the holders of common stock; 

provided, however, that in no case shall 

such quorum be less than 331⁄3% of the 

outstanding shares of the company’s 

common voting stock (the ‘‘Nasdaq 

Quorum Requirement’’). Nasdaq notes 

that domestic listed companies are 

subject to quorum requirements under 

the laws of their states of 

incorporation.4

Nasdaq recently discovered that the 

laws of certain foreign jurisdictions are 

in direct conflict with the Nasdaq 

Quorum Requirement. In particular, 

Nasdaq was approached by a French 

company that took advantage of the 

foreign private issuer exception and 

relied on home country practices in lieu 

of the Nasdaq Quorum Requirement, but 

lost its foreign private issuer status and 

cannot comply with the Nasdaq 

Quorum Requirement due to certain 

French law requirements.5 In that 

regard, Article L. 225–98 of the French 

Commercial code 6 provides that upon 

first notice, the ordinary shareholders’ 

meeting shall have a quorum 

requirement of one-fifth (20%) of the 

shares entitled to vote. The Article 

further provides that by-laws of a 

4160 Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 

7A foreign company will qualify as a foreign 

private issuer if 50% or less of its outstanding 

voting securities are held by U.S. residents; or if 

more than 50% of its outstanding voting securities 

are held by U.S. residents and none of the following 

three circumstances applies: the majority of its 

executive officers or directors are U.S. citizens or 

residents; more than 50% of the issuer’s assets are 

located in the United States; or the issuer’s business 

is administered principally in the United States. 

These tests are found in Securities Act Rule 405 and 

Exchange Act Rule 3b–4. 

8See Listing Rule 5615(a)(3)(B) and Listing Rule 

IM–5615–3. 

9As of December 31, 2019, approximately 62% of 

DBV’s outstanding ordinary shares were held by 

U.S. residents. See company’s Form 20–F filed on 

March 20, 2020. As of June 30, 2020, according to 

the information provided to Nasdaq by the 

company, more than 50% of DBV’s outstanding 

ordinary shares were held by U.S. residents and the 

majority of DBV’s executive officers were U.S. 

citizens and residents and DBV’s business was 

administered principally in the United States. 

Accordingly, DBV will no longer qualify as a 

foreign private issuer and will be required to 

comply with SEC rules for domestic issuers as of 

January 1, 2021. 

10The term non-US company refers to a company 

incorporated outside of U.S. See also Listing Rules 

5630 and 5640 that use this term. 

11The proposed modified Nasdaq Quorum 

Requirement will apply only in circumstances 

where the company’s home country law specifically 

prohibits the company from establishing a higher 

quorum required the Nasdaq Quorum Requirement, 

whereas Listing 5640 allows Nasdaq to accept any 

voting rights structure of a non-U.S. company that 

is not prohibited by the company’s home country 

law. 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(5). 

French company whose shares are listed 

on a regulated market (which includes 

Euronext Paris) cannot provide for a 

higher quorum for shareholders’ 

meetings than that set forth above. As 

this rule constitutes a public order 

under French law, it is required to be 

followed and compliance is enforced by 

the French courts and by the French 

stock exchange authority, the Autorite ́

des marche ́s financiers. According to 

article L. 225–121, any decision taken in 

violation of the aforementioned rules on 

quorum is deemed null and void. As 

such, a French company listed on a 

regulated market cannot comply with 

the Nasdaq Quorum Requirement. 

Listing Rule 5615(a)(3) allows a 

foreign private issuer 7 to follow its 

home country practice in lieu of the 

requirements of the Rule 5600 Series, 

including the Nasdaq Quorum 

Requirement, subject to certain 

disclosure requirements and the 

requirement that an independent 

counsel in such company’s home 

country certify to Nasdaq that the 

company’s practices are not prohibited 

by the home country’s laws.8

Accordingly, a French foreign private 

issuer could rely on Listing Rule 

5615(a)(3) to remain in compliance with 

the Nasdaq corporate governance 

requirements in the Rule 5600 Series.9

A non-U.S. company 10 that is not a 

foreign private issuer currently is 

required to comply with the Nasdaq 

Quorum Requirement without regard to 

the requirements of such company’s 

home country laws. As described above, 

for some companies, including DBV, the 

company’s home country law prohibits 

the company from establishing a higher 

quorum required by the Nasdaq Quorum 

Requirement. 

Accordingly, Nasdaq proposes to 

modify the Nasdaq Quorum 

Requirement to allow Nasdaq to accept 

any quorum requirement for a non-U.S. 

company if such company’s home 

country law mandates such quorum for 

the shareholders’ meeting and prohibits 

the company from establishing the 

higher quorum required the Nasdaq 

Quorum Requirement. This approach is 

consistent with the provisions of Listing 

Rule 5640 that allows Nasdaq to accept 

any action or issuance relating to the 

voting rights structure of a non-U.S. 

company that is not prohibited by the 

company’s home country law.11 Nasdaq 

proposes to require that a company 

relying on this provision shall submit to 

Nasdaq a written statement from an 

independent counsel in such company’s 

home country describing the home 

country law that conflicts with Nasdaq’s 

quorum requirement. Nasdaq also 

proposes to require such counsel to 

certify that, as the result of the conflict 

with the home country law, the 

company is prohibited from complying 

with the Nasdaq Quorum Requirement. 

Nasdaq also proposes to modify 

Listing Rule 5615(a)(4)(E) governing the 

quorum requirements for limited 

partnerships listed on Nasdaq to also 

reflect this change to the Nasdaq 

Quorum Requirement. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,12 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,13

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest. 

Nasdaq believes that the proposed 

amendments to Listing Rules 5620(c) 

and 5615(a)(4)(E) are designed to protect 

interests and the public interest because 

the proposal would eliminate a conflict 

forcing a company to choose between 

following Nasdaq’s rules or the law in 

its home jurisdiction. Further, while the 

Nasdaq Quorum Requirement would not 

apply, there would continue to be other 

protections for shareholders provided 

by the company’s home country laws. 

Nasdaq also believes that Nasdaq’s long 

experience of listing foreign private 

issuers, including DBV, while allowing 

such companies to rely on home 

country practices in lieu of the Nasdaq 

Quorum Requirement provides evidence 

of an appropriate level of investor 

protection. In addition, this 

modification is consistent with the 

provisions of Listing Rule 5640 that 

allows Nasdaq to accept any action or 

issuance relating to the voting rights 

structure of a non-U.S. company that is 

not prohibited by the company’s home 

country law. 

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. The 

proposed rule change will address 

conflicting requirements of jurisdictions 

affecting a small number of non-U.S. 

companies, as described above; and as 

such, these changes are neither intended 

to, nor expected to, impose any burden 

on competition. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission shall: (a) By order 

approve or disapprove such proposed 

rule change, or (b) institute proceedings 

to determine whether the proposed rule 

change should be 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: 

Federal Register / Vol. 86, No. 10 / Friday, January 15, 2021 / Notices 4161 

14 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5For example, if the Exchange becomes aware of 

a transaction fee billing error on January 4, 2021, 

the Exchange will resolve the error by crediting or 

debiting Members based on the fees or rebates that 

should have been applied to any impacted 

transactions during October, November and 

December 2020. The Exchange notes that because 

it bills in arrears, the Exchange would be able to 

correct the error in advance of issuing the January 

2021 invoice and therefore, transactions impacted 

through the date of discovery (in this example, 

January 4, 2021) and thereafter, would be billed 

correctly. 

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– 

NASDAQ–2020–100 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–NASDAQ–2020–100. 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–NASDAQ–2020–100 and 

should be submitted on or before 

February 5, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–00814 Filed 1–14–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90897; File No. SR– 

CboeBZX–2020–094] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend its 

Options and Equities Fees Schedules 

To Adopt a Provision Relating to 

Billing Errors and Fee Disputes 

January 11, 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 December 

31, 2020, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposal as a ‘‘non-controversial’’ 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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 

options and equities fees schedules to 

adopt a provision relating to billing 

errors and fee disputes. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

equities/regulation/rule_filings/bzx/), 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 

options and equities fees schedules to 

adopt a provision relating to billing 

errors and fee disputes. Particularly, the 

Exchange proposes to provide that after 

three calendar months, all fees and 

rebates assessed by the Exchange would 

be considered final. More specifically, 

the Exchange would adopt language in 

the fees schedules that would provide 

that all fees and rebates assessed prior 

to the three full calendar months before 

the month in which the Exchange 

becomes aware of a billing error shall be 

considered final. Particularly, the 

Exchange will resolve an error by 

crediting or debiting Members and NonMembers based on the fees or rebates 

that should have been applied in the 

three full calendar months preceding 

the month in which the Exchange 

became aware of the error, including to 

all impacted transactions that occurred 

during those months.5 The Exchange 

will apply the three month look back 

regardless of whether the error was 

discovered by the Exchange or by a 

Member or Non-Member that submitted 

a fee dispute to the Exchange. The 

Exchange also proposes to provide all 

disputes concerning fees and rebates 

assessed by the Exchange would have to 

be submitted to the Exchange in writing 

and accompanied by supporting 

documentation. 

The purpose of the proposed change 

is to encourage Members and NonMembers to promptly review their 

Exchange invoices so that any disputed 

charges can be addressed in a timely 

manner. The Exchange notes that it 

provides Members with both daily and 

monthly fee reports and thus believes 

they should be aware of any potential 

billing errors within three months. 

Requiring that Members and NonMembers submit disputes in writing and 

provide supporting documentation 

encourages them to promptly review 

their invoices so that any disputed 

charges can be addressed in a timely