Federal Register / Vol. 86, No. 20 / Tuesday, February 2, 2021 / Notices 7907 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes January 4, 2021 (SR–CboeBZX–2021–001). 

On January 13, 2021, the Exchange withdrew that 

filing and submitted this proposal. 

4See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (December 29, 

2020), available at https://markets.cboe.com/us/ 

equities/market_statistics/. 

5The TRIM and SLIM routing strategies are 

routing strategies in which an order checks the 

System for available shares if so instructed by the 

entering User and then is sent to destinations on the 

applicable System routing table. See Rule 

11.13(b)(3)(G); see also Cboe Routing Strategies, 

FIX/BOE Routing Tags and Instructions, available 

at: https://cdn.cboe.com/resources/features/Cboe_

USE_RoutingStrategies.pdf. 

of this analysis, the burden associated 

with the requirements of rule 30b2–1 

has been included in the collection of 

information requirements of rule 30e–1 

(17 CFR 270.30e–1) and Form N–CSR, 

rather than the rule. The Commission 

has, however, requested a one hour 

burden for administrative purposes. 

The collection of information under 

rule 30b2–1 is mandatory. The 

information provided under rule 30b2– 

1 is not kept confidential. An agency 

may not conduct or sponsor, and a 

person is not required to respond to, a 

collection of information unless it 

displays a currently valid OMB control 

number. 

The public may view the background 

documentation for this information 

collection at the following website, 

www.reginfo.gov. Comments should be 

directed to: (i) Desk Officer for the 

Securities and Exchange Commission, 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10102, New Executive 

Office Building, Washington, DC 20503, 

or by sending an email to: 

Lindsay.M.Abate@omb.eop.gov; and (ii) 

David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Cynthia 

Roscoe, 100 F Street NE, Washington, 

DC 20549 or send an email to: PRA_

Mailbox@sec.gov. Written comments 

and recommendations for the proposed 

information collection should be sent 

within 30 days of publication of this 

notice to www.reginfo.gov/public/do/ 

PRAMain. Find this particular 

information collection by selecting 

‘‘Currently under 30-day Review—Open 

for Public Comments’’ or by using the 

search function. 

Dated: January 27, 2021. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02126 Filed 2–1–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90997; File No. SR– 

CboeBZX–2021–010] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Relating To 

Amend Its Fee Schedule To Eliminate 

Certain Routing Fee Codes 

January 27, 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 

13, 2021, 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 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 BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the fee schedule applicable to 

Members and non-Members of the 

Exchange pursuant to BZX Rules 15.1(a) 

and (c). Changes to the fee schedule 

pursuant to this proposal are effective 

upon filing. The text of the proposed 

rule change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

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 

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 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

fee schedule applicable to its equities 

trading platform (‘‘BZX Equities’’) by 

eliminating certain routing fee codes.3

The Exchange first notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. More 

specifically, the Exchange is only one of 

16 registered equities exchanges, as well 

as a number of alternative trading 

systems and other off-exchange venues 

that do not have similar self-regulatory 

responsibilities under the Exchange Act, 

to which market participants may direct 

their order flow. Based on publicly 

available information,4 no single 

registered equities exchange has more 

than 16% of the market share. Thus, in 

such a low-concentrated and highly 

competitive market, no single equities 

exchange possesses significant pricing 

power in the execution of order flow. 

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow or discontinue to 

reduce use of certain categories of 

products, in response to fee changes. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees, and market participants can readily 

trade on competing venues if they deem 

pricing levels at those other venues to 

be more favorable. 

The Exchange assesses fees in 

connection with orders routed away to 

various exchanges. As a result of 

minimal use in the last months, the 

Exchange proposes to eliminate the 

following routing fee codes currently 

under the Fee Codes and Associated 

Fees section of the Fee Schedule: 

• Fee code 8, which is appended to 

Members’ orders routed to NYSE 

American that adds liquidity and 

assesses a charge of $0.00020 per 

contract; and 

• Fee code MX, which is appended to 

Members’ orders routed to NYSE 

American using the TRIM or SLIM 5

routing strategy and assesses a charge of 

$0.00020 per contract. 

The Exchange has observed a minimal 

amount of volume in recent months in 

orders yielding fee codes 8 or MX. In 

particular, over the last six months the 

Exchange observed that orders yielding 

fee code MX accounted for 


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7908 Federal Register / Vol. 86, No. 20 / Tuesday, February 2, 2021 / Notices 

6 15 U.S.C. 78f. 

7 15 U.S.C. 78f(b)(4). 

8 15 U.S.C. 78f(b)(5). 

approximately only 0.11% of all routed 

order volume and orders yielding fee 

code 8 accounted for approximately 

only 0.02% of all routed order volume. 

The Exchange believes that, because so 

few Users elect to route their orders 

with specifications to which fee codes 8 

or MX, the current demand does not 

warrant the infrastructure and ongoing 

Systems maintenance required to 

support these separate fee codes. 

Therefore, the Exchange now proposes 

to delete fee codes 8 and MX in the Fee 

Schedule. 

In light of the proposed fee code 

deletions, the Exchange also proposes to 

update the description to which fee 

code X is applicable. Currently, the 

description for orders yielding fee code 

X applies to Members’ orders routed to 

a displayed market to remove liquidity 

using Parallel D, Parallel 2D, ROUT, 

ROUX or Post to Away routing strategy. 

Fee code X assesses a charge of $0.0030 

per contract. Essentially, fee code X is 

designed to apply, and currently 

applies, to all other routed orders that 

are not otherwise specified under other 

fee codes in the Fee Schedule. However, 

as currently written, the description of 

orders that yield fee code X would not 

encompass those orders that currently 

yield fee codes 8 and MX. Therefore, the 

proposed rule change updates the 

description of orders that yield fee code 

X to ‘‘Routed.’’ The Exchange notes that 

the corresponding fee will remain 

unchanged and is the standard rate 

routing fee assessed pursuant to the 

Standard Rates section of the Fee 

Schedule. As a result of the proposed 

description, Members will continue to 

be able to choose to route their orders 

with the same specifications to which 

fee codes 8 and MX currently apply— 

such orders will simply be assessed the 

fee currently in place for orders yielding 

fee code X (i.e., routed orders not 

otherwise specified under other fee 

codes in the Fee Schedule). The 

Exchange notes that the proposed 

description for fee code X does not alter 

any of the routed orders to which fee 

code X currently applies. The Exchange 

also notes that the proposed description 

for fee code X is consistent with the 

description associated with 

corresponding fee code X on the 

Exchange’s affiliated equities exchanges, 

Cboe EDGX Exchange, Inc. (‘‘EDGX’’) 

and Cboe EDGA Exchange Inc. 

(‘‘EDGA’’). 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,6

in general, and furthers the objectives of 

Section 6(b)(4),7 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its Members and 

issuers and other persons using its 

facilities. The Exchange also believes 

that the proposed rule change is 

consistent with the objectives of Section 

6(b)(5) 8 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest, and, 

particularly, is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange believes the proposed 

rule changes are reasonable, equitable 

and not unfairly discriminatory. The 

Exchange first notes that routing 

through the Exchange is optional. The 

Exchange believes the proposed rule 

change to remove fee codes 8 and MX 

is reasonable as the Exchange has 

observed a minimal amount of volume 

in orders yielding these fee codes and, 

therefore, the continuation of these fee 

codes does not warrant the 

infrastructure and ongoing Systems 

maintenance required to support 

separate fee codes for specific routed 

orders. As such, the Exchange also 

believes that is reasonable and equitable 

to assess routed orders which meet the 

specifications to which fee codes 8 and 

MX are currently applicable the slightly 

higher standard routing fee currently in 

place for all other routed orders that are 

not otherwise specified under other fee 

codes in the Fee Schedule—via fee code 

X, as amended. The Exchange believes 

it is reasonable to update the 

description for orders that yield fee code 

X in a manner that reflects the intent of 

fee code X, which is to apply to routed 

orders not otherwise specified under 

other fees codes in the Fee Schedule, 

and will thus apply to routed orders that 

currently yield fee codes 8 and MX. The 

Exchange believes that the proposed 

updated description is reasonable 

because it does not alter any of the 

routed orders to which fee code X 

currently applies and will allow 

Members to continue to be able to 

choose to route their orders with the 

same specifications to which fee codes 

8 and MX currently apply. The 

Exchange again notes that the proposed 

description for fee code X is consistent 

with the description associated with 

corresponding fee code X on the 

Exchange’s affiliated equities exchanges. 

The Exchange believes that the 

proposed rule change is equitable and 

not unfairly discriminatory because 

Members will continue to have the 

option to elect to route their orders in 

the same manner (i.e., routed to NYSE 

American that add liquidity and routed 

to NYSE American using the TRIM or 

SLIM routing strategy), which will be 

automatically and uniformly be assessed 

the applicable standard rates in place 

for generally all other routed orders 

under fee code X. Further, if members 

do not favor the Exchange’s pricing for 

routed orders, they can send their 

routable orders directly to away markets 

instead of using routing functionality 

provided by the Exchange. Routing 

through the Exchange is optional, and 

the Exchange operates in a competitive 

environment where market participants 

can readily direct order flow to 

competing venues or providers of 

routing services if they deem fee levels 

to be excessive. The Exchange believes 

that the updated description for orders 

that yield fee code X is equitable and 

not unfairly discriminatory because it 

does not impact the routed orders that 

currently yield fee code X; the same 

orders will continue to yield fee code X 

and will continue to be automatically 

and uniformly assessed the 

corresponding fee. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe the proposed 

rule change will impose any burden on 

intramarket competition because all 

Members orders that would yield 

current fee codes 8 or MX, will 

automatically and uniformly be assessed 

the fees already in place for all other 

routed orders generally under fee code 

X. Fee code X, as amended, will 

continue to apply to the same routed 

orders as it currently does, which will 

continue to be automatically and 

uniformly assessed the corresponding 

fee. Ultimately, all routed orders will 

generally be assessed the same fee. 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 


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Federal Register / Vol. 86, No. 20 / Tuesday, February 2, 2021 / Notices 7909 

9See supra note 4. 10See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 11NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

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

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f)(2). 

14 15 U.S.C. 78s(b)(2)(B). 

15 17 CFR 200.30–3(a)(12). 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

The Exchange again notes that orders 

that meet the specifications to which fee 

codes 8 or MX would currently apply, 

will yield the same fee codes and be 

assessed the same corresponding rates 

that are already in place in the Fee 

Schedule for routed orders generally, as 

previously filed with the Commission. 

Also, as previously discussed, the 

Exchange operates in a highly 

competitive market. Members have 

numerous alternative venues that they 

may participate on and director their 

order flow, including 15 other options 

exchanges and off-exchange venues. 

Additionally, the Exchange represents a 

small percentage of the overall market. 

Based on publicly available information, 

no single options exchange has more 

than 16% of the market share.9

Therefore, no exchange possesses 

significant pricing power in the 

execution of option order flow. Indeed, 

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. Moreover, the Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 10 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. Securities and 

Exchange Commission, the D.C. Circuit 

stated as follows: ‘‘[n]o one disputes 

that competition for order flow is 

‘fierce.’ . . . As the SEC explained, ‘[i]n 

the U.S. national market system, buyers 

and sellers of securities, and the brokerdealers 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’. . . .’’.11 Accordingly, the 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) of the Act 12 and 

subparagraph (f)(2) of Rule 19b–4 

thereunder,13 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) 14 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– 

CboeBZX–2021–010 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–CboeBZX–2021–010. 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–CboeBZX–2021–010, and 

should be submitted on or before 

February 23, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02116 Filed 2–1–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91000; File No. SR– 

CboeEDGA–2021–003] 

Self-Regulatory Organizations; Cboe 

EDGA Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend the 

Fee Schedule 

January 27, 2021. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),2 and Rule 19b–4 thereunder,3

notice is hereby given that on January 

13, 2021, Cboe EDGA Exchange, Inc. 

(the ‘‘Exchange’’ or ‘‘EDGA’’) filed with 

the Securities and Exchange 


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