Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices 7437 

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

2 17 CFR 240.19b–4. 

3 If BOX wishes to provide additional temporary 

relief from the rule requirements identified in this 

proposed rule change beyond April 30, 2021, BOX 

will submit a separate rule filing to further extend 

the temporary extension of time. 

4See Exchange Act Release No. 90617 (December 

9, 2020), 85 FR 81258 (December 15, 2020) (SR– 

FINRA–2020–043) (the ‘‘FINRA Filing’’). The 

Exchange notes that the FINRA Filing also provides 

temporary relief to individuals registered with 

FINRA as Operations Professionals under FINRA 

Rule 1220. The Exchange does not have a 

registration category for Operations Professionals 

and therefore, the Exchange is not proposing to 

adopt that aspect of the FINRA Filing. 

5See https://www.finra.org/rules-guidance/keytopics/covid-19/faq#qe. 

6At the outset of the COVID–19 pandemic, all 

FINRA qualification examinations were 

administered at test centers operated by Prometric. 

Based on the health and welfare concerns resulting 

from COVID–19, in March Prometric closed all of 

its test centers in the United States and Canada and 

began to slowly reopen some of them at limited 

capacity in May. Currently, Prometric has resumed 

testing in many of its United States and Canada test 

centers, at either full or limited occupancy, based 

on local and government mandates. 

7BOX Rule 2020(d) is similar to FINRA Rule 

1210.04. The Exchange notes there are several 

differences between its rule text and FINRA’s rule. 

FINRA’s rule provides that registered persons under 

the rule must have at least 18 months of experience 

functioning as a representative within a five-year 

period immediately preceding their designation as 

principal, and the person must have fulfilled all 

applicable prerequisite registration, fee and 

examination requirements prior to their designation 

as principal. The Exchange’s rule does not have 

similar qualifying prerequisites. Unlike the 

Exchange’s rule text, FINRA’s rule also provides 

that the requirements of the rule apply to any 

principal category, and persons registered as an 

‘‘Order Processing Assistant Representative’’, or a 

‘‘Foreign Associate’’ are not eligible to be 

designated as a principal under the rule. Lastly, 

FINRA’s rule also accounts for situations in which 

a person registered as a principal can function in 

another principal category for a period of 120 

calendar days prior to passing an appropriate 

qualification examination. The Exchange believes 

these differences are minor in substance and do not 

materially impact this proposal. Specifically, the 

Exchange simply seeks to adopt similar relief in 

regards to its examination requirements for 

representatives functioning as principals, due to the 

COVID–19 pandemic. 

8FINRA Rule 1210.04 (Requirements for 

Registered Persons Functioning as Principals for a 

Limited Period) allows a member firm to designate 

certain individuals to function in a principal 

Continued 

Commission, including whether the 

information shall have practical utility; 

(b) the accuracy of the Commission’s 

estimates of the burden of the proposed 

collection of information; (c) ways to 

enhance the quality, utility, and clarity 

of the information on respondents; and 

(d) ways to minimize the burden of the 

collection of information on 

respondents, including through the use 

of automated collection techniques or 

other forms of information technology. 

Consideration will be given to 

comments and suggestions submitted in 

writing within 60 days of this 

publication. 

The Commission may not conduct or 

sponsor a collection of information 

unless it displays a currently valid 

control number. No person shall be 

subject to any penalty for failing to 

comply with a collection of information 

subject to the PRA that does not display 

a valid Office of Management and 

Budget (OMB) control number. 

Please direct your written comments 

to: Dave Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o Cynthia 

Roscoe, 100 F St. NE, Washington, DC 

20549 or send an email to: PRA_

Mailbox@sec.gov. 

Dated: January 22, 2021. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01816 Filed 1–27–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90973; File No. SR–BOX– 

2021–02] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Adopt Temporary IM– 

2020–1 (Temporary Extension for 

Representatives To Function as 

Principals) 

January 22, 2021. 

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

Securities Exchange Act of 1934 (‘‘Act’’ 

or ‘‘Exchange Act’’) 1 and Rule 19b–4 

thereunder,2 notice is hereby given that 

on January 12, 2021, the BOX Exchange 

LLC (‘‘BOX’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (‘‘SEC’’ or ‘‘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 

The Exchange proposes to adopt 

temporary IM–2020–1 (Temporary 

Extension for Representatives to 

Function as Principals). The text of the 

proposed rule change is available from 

the principal office of the Exchange, at 

the Commission’s Public Reference 

Room and also on the Exchange’s 

internet website at http://

boxoptions.com. 

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 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 purpose of the proposed rule 

change is to adopt temporary IM–2020– 

1 (Temporary Extension for 

Representatives to Function as 

Principals). The proposed rule change 

would extend the 120-day period that 

certain individuals on the Exchange can 

function as a Principal without having 

successfully passed an applicable 

qualification examination through April 

30, 2021,3 and would apply only to 

those individuals who were designated 

to function as a principal prior to 

January 1, 2021. This proposed rule 

change is based on a filing recently 

submitted by the Financial Industry 

Regulatory Authority, Inc. (‘‘FINRA’’) 4

and is intended to harmonize the 

Exchange’s registration rules with those 

of FINRA so as to promote uniform 

standards across the securities industry. 

The COVID–19 pandemic is an 

unpredictable, exogenous event that has 

resulted in unavoidable disruptions to 

the securities industry and impacted 

Participant firms, regulators, investors 

and other stakeholders. In response to 

COVID–19, earlier this year FINRA 

began providing temporary relief by way 

of frequently asked questions 

(‘‘FAQs’’) 5 to address disruptions to the 

administration of FINRA qualification 

examinations caused by the pandemic 

that have significantly limited the 

ability of individuals to sit for 

examinations due to Prometric test 

center capacity issues.6

FINRA published the first FAQ on 

March 20, 2020, providing that 

individuals who were designated to 

function as principals under FINRA 

Rule 1210.04 7 prior to February 2, 2020, 

would be given until May 31, 2020, to 

pass the appropriate principal 

qualification examination.8 On May 19, 

7438 Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices 

capacity for 120 calendar days before having to pass 

an appropriate principal qualification examination. 

BOX Rule 2020(d) provides the same allowance to 

Participants. 

9See Exchange Act Release No. 89732 (September 

1, 2020), 85 FR 55535 (September 8, 2020) (SR– 

FINRA–2020–026). 

10See, e.g., Meryl Kornfield, Jacqueline Dupree, 

Marisa Iati, Paulina Villegas, Siobhan O’Grady and 

Hamza Shaban, New daily coronavirus cases in U.S. 

rise to 145,000, latest all-time high, Wash. Post, 

November 11, 2020, https://

www.washingtonpost.com/nation/2020/11/11/ 

coronavirus-covid-live-updates-us/. 

11 Information about continued impact of COVID– 

19 on FINRA-administered examinations is 

available at https://www.finra.org/rules-guidance/ 

key-topics/covid-19/exams. 

12 Information from Prometric about its safety 

practices and the impact of COVID–19 on its 

operations is available at https://

www.prometric.com/corona-virus-update. See also 

id. 

13Earlier this year, an online test delivery service 

was launched for candidates seeking to take 

qualification examination remotely. Only certain 

qualification examinations are available online. See 

supra note 11. FINRA is considering making 

additional qualification examinations available 

remotely on a limited basis. 

14See, e.g., Centers for Disease Control and 

Prevention, How to Protect Yourself & Others, 

https://www.cdc.gov/coronavirus/2019-ncov/ 

prevent-getting-sick/prevention.html. 

15See supra notes 4 and 9. 

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

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

2020, FINRA extended the relief to pass 

the appropriate examination until June 

30, 2020. On June 29, 2020, FINRA 

again extended the temporary relief 

providing that individuals who were 

designated to function as principals 

under FINRA Rule 1210.04 prior to May 

4, 2020, would be given until August 31, 

2020, to pass the appropriate principal 

qualification examination. On August 

28, 2020, FINRA again extended the 

temporary relief to pass the principal 

qualification examinations until 

December 31, 2020.9

The COVID–19 conditions 

necessitating the extension of relief 

provided in the FINRA FAQ continue to 

persist and in fact appear to be 

worsening.10 One of the impacts of 

COVID–19 continues to be serious 

interruptions in the administration of 

FINRA qualification examinations at 

Prometric test centers and the limited 

ability of individuals to sit for the 

examinations.11 Although Prometric has 

been reopening its test centers, 

Prometric’s safety practices mean that 

currently not all test centers are open, 

some of the open test centers are at 

limited capacity, and some open test 

centers are delivering only certain 

examinations that have been deemed 

essential by the local government.12

Furthermore, Prometric has had to close 

some reopened test centers due to 

incidents of COVID–19 cases. The initial 

nationwide closure in March along with 

the inability to fully reopen all 

Prometric test centers due to COVID–19 

have led to a significant backlog of 

individuals who are waiting to sit for 

FINRA examinations that are not 

available online, including the General 

Securities Principal Exam (Series 24).13

In addition, firms are continuing to 

experience operational challenges with 

much of their personnel working from 

home due to shelter-in-place orders, 

restrictions on businesses and social 

activity imposed in various states, and 

adherence to other social distancing 

guidelines consistent with the 

recommendations of public health 

officials.14 As a result, firms continue to 

face potentially significant disruptions 

to their normal business operations that 

may include a limitation of in-person 

activities and staff absenteeism as a 

result of the health and welfare 

concerns stemming from COVID–19. 

Such potential disruptions may be 

further exacerbated and may even affect 

client services if firms cannot continue 

to keep principal positions filled as they 

may have difficulty finding other 

qualified individuals to transition into 

these roles or may need to reallocate 

employee time and resources away from 

other critical responsibilities at the firm. 

These ongoing, extenuating 

circumstances make it impracticable for 

Participants to ensure that the 

individuals whom they have designated 

to function in a principal capacity, as 

set forth in BOX Rule 2020(d), are able 

to successfully sit for and pass an 

appropriate qualification examination 

within the 120-calendar day period 

required under the rule, or to find other 

qualified staff to fill this position. The 

ongoing circumstances also require 

individuals to be exposed to the health 

risks associated with taking an inperson examination, because the 

General Securities Principal 

examination is not available online. 

Therefore, the Exchange is proposing to 

continue the temporary relief provided 

through the FINRA FAQs and FINRA’s 

subsequent rule filings 15 by adopting 

IM–2020–1 to extend the 120-day period 

during which an individual can 

function as a principal before having to 

pass an applicable qualification 

examination until April 30, 2021. The 

proposed rule change would apply only 

to those individuals who were 

designated to function as a principal 

prior to January 1, 2021. Any 

individuals designated to function as a 

principal on or after January 1, 2021, 

would need to successfully pass an 

appropriate qualification examination 

within 120 days. 

The Exchange believes that this 

proposed extension of time is tailored to 

address the needs and constraints on a 

Participant’s operations during the 

COVID–19 pandemic, without 

significantly compromising critical 

investor protection. The proposed 

extension of time will help to minimize 

the impact of COVID–19 on Participants 

by providing continued flexibility so 

that Participants can ensure that 

principal positions remain filled. The 

potential risks from the proposed 

extension of the 120-day period are 

mitigated by the Participant’s continued 

requirement to supervise the activities 

of these designated individuals and 

ensure compliance with federal 

securities laws and regulations, as well 

as the Exchange’s rules. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the 

Act,16 in general, and Section 6(b)(5) of 

the Act,17 in particular, because it is 

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 

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. 

The proposed rule change is intended 

to minimize the impact of COVID–19 on 

Participant operations by extending the 

120-day period certain individuals may 

function as a principal without having 

successfully passed an appropriate 

qualification examination under BOX 

Rule 2020(d) until April 30, 2021. The 

proposed rule change does not relieve 

Participants from maintaining, under 

the circumstances, a reasonably 

designed system to supervise the 

activities of their associated persons to 

achieve compliance with applicable 

securities laws and regulations, and 

with applicable BOX rules that directly 

serve investor protection. In a time 

when faced with unique challenges 

resulting from the COVID–19 pandemic, 

the Exchange believes that the proposed 

rule change is a sensible 

accommodation that will continue to 

afford Participants the ability to ensure 

that critical positions are filled and 

client services maintained, while 

continuing to serve and promote the 

protection of investors and the public 

interest in this unique environment. 

Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices 7439 

18See FINRA Filing, 85 FR at 81260. 

19 15 U.S.C. 78s(b)(3)(A). 

20 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

21See supra note 14. 

22See supra notes 11 and 12. The Exchange states 

that Prometric has also had to close some reopened 

test centers due to incidents of COVID–19 cases. 

23See supra note 13. FINRA is considering 

making additional qualification examinations 

available remotely on a limited basis. 

24The Exchange states that Participants remain 

subject to the continued requirement to supervise 

the activities of these designated individuals and 

ensure compliance with federal securities laws and 

regulations, as well as BOX rules. 

25See supra note 3. 

26As noted above by the Exchange, this proposed 

temporary change is based on a recent filing by 

FINRA that the Commission approved with a 

waiver of the 30-day operative delay. See FINRA 

Filing, 85 FR at 81260. 

27For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule change’s impact on efficiency, 

competition, and capital formation. See 15 U.S.C. 

78c(f). 

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 Exchange Act. 

The proposed rule change is intended to 

provide temporary relief given the 

impacts of the COVID–19 pandemic 

crisis and to also maintain consistency 

with the rules of other self-regulatory 

organizations (‘‘SROs’’) with respect to 

the registration requirements applicable 

to Participants and their registered 

personnel. In that regard, the Exchange 

believes that any burden on competition 

would be clearly outweighed by 

providing Participants with temporary 

relief in this unique environment while 

also ensuring clear and consistent 

requirements applicable across SROs 

and mitigating any risk of SROs 

implementing different standards in 

these important areas. In its filing, 

FINRA notes that the proposed rule 

change is necessary to temporarily 

rebalance the attendant benefits and 

costs of the obligations under FINRA 

Rule 1210 in response to the impacts of 

the COVID–19 pandemic, which is 

equally applicable to the changes the 

Exchange proposes.18 The Exchange 

accordingly incorporates FINRA’s 

abbreviated economic impact 

assessment by reference. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

Written comments were neither 

solicited nor received. 

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 19 and Rule 19b– 

4(f)(6) thereunder.20

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative for 30 days after the 

date of filing. However, pursuant to 

Rule 19b–4(f)(6)(iii), the Commission 

may designate a shorter time if such 

action is consistent with the protection 

of investors and the public interest. The 

Exchange has asked the Commission to 

waive the 30-day operative delay so that 

the proposed rule change may become 

operative immediately upon filing. As 

noted above, the Exchange stated that 

the proposed extension of time will help 

minimize the impact of the COVID–19 

outbreak on Participants’ operations by 

allowing them to keep principal 

positions filled and minimizing 

disruptions to client services and other 

critical responsibilities. The Exchange 

further stated that the ongoing 

extenuating circumstances of the 

COVID–19 pandemic make it 

impractical to ensure that individuals 

designated to act in these capacities are 

able to take and pass the appropriate 

qualification examination during the 

120-calendar day period required under 

the rules. The Exchange also explained 

that shelter-in-place orders, restrictions 

on business and social activity, and 

adherence to social distancing 

guidelines consistent with the 

recommendations of public officials 

remain in place in various states.21 In 

addition, the Exchange observed that, 

following a nationwide closure of all 

test centers earlier in the year, some test 

centers have re-opened, but are 

operating at limited capacity or are only 

delivering certain examinations that 

have been deemed essential by the local 

government.22 Although, as the 

Exchange noted, FINRA has launched 

an online test delivery service to help 

address this backlog, the General 

Securities Principal (Series 24) 

Examination is not available online.23

Nevertheless, the Exchange explained 

that the proposed rule change will 

provide needed flexibility to ensure that 

these positions remain filled and is 

tailored to address the constraints on 

Participants’ operations during the 

COVID–19 pandemic without 

significantly compromising critical 

investor protection.24

The Commission observes that the 

Exchange’s proposal, like FINRA’s 

analogous filing, provides only 

temporary relief from the requirement to 

pass certain qualification examinations 

within the 120-day period in the rules. 

As proposed, this relief would extend 

the 120-day period that certain 

individuals can function as principals 

through April 30, 2021. If a further 

extension of temporary relief from the 

rule requirements identified in this 

proposal beyond April 30, 2021 is 

required, the Exchange noted that it may 

submit a separate rule filing to extend 

the effectiveness of the temporary relief 

under these rules.25 For these reasons, 

the Commission believes that waiver of 

the 30-day operative delay is consistent 

with the protection of investors and the 

public interest.26 Accordingly, the 

Commission hereby waives the 30-day 

operative delay and designates the 

proposal operative upon filing.27

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 Exchange 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 Exchange 

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– 

BOX–2021–02 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

7440 Federal Register / Vol. 86, No. 17 / Thursday, January 28, 2021 / Notices 

28 17 CFR 200.30–3(a)(12). 

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–CboeEDGX–2021– 

004). 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 18, 

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

equities/market_statistics/. 

5A Sponsored Participant is a person which has 

entered into a sponsorship arrangement with a 

Sponsoring Member pursuant to Rule 11.3, which 

permits a Sponsored Participant to obtain 

authorized access to the System only if such access 

is authorized in advance by one or more Sponsoring 

Members. See Rules 1.5(z) and 11.3. 

6A Sponsoring Member is a Member that is a 

registered broker-dealer and that has been 

designated by a Sponsored Participant to execute, 

clear and settle transactions resulting from the 

System. The Sponsoring Member shall be either (i) 

a clearing firm with membership in a clearing 

agency registered with the Commission that 

maintains facilities through which transactions may 

be cleared or (ii) a correspondent firm with a 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BOX–2021–02. 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 such 

filing also will be available for 

inspection and copying at the principal 

office of BOX. 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–BOX– 

2021–02 and should be submitted on or 

before February 18, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01837 Filed 1–27–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90970; File No. SR– 

CboeEDGX–2021–007] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change To Establish a 

Monthly Fee Assessed on Members’ 

MPIDs 

January 22, 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 EDGX Exchange, Inc. 

(the ‘‘Exchange’’) 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 EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX Equities’’) 

proposes to amend its fee schedule to 

establish a fee in connection with a 

Member’s Market Participant 

Identifier(s) (‘‘MPID’’). 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/ 

options/regulation/rule_filings/edgx/), 

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 

Fee Schedule to adopt a monthly fee 

assessed on Members’ MPIDs.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 consolidated equity market 

share and currently the Exchange 

represents approximately 7% of the U.S. 

equities market. Thus, in such a lowconcentrated and highly competitive 

market, no single equities exchange 

possesses significant pricing power in 

the execution of order flow. The 

Exchange further notes that brokerdealers are not compelled to be 

Members of the Exchange, and a 

significant proportion of broker-dealers 

that trade U.S. equity securities have, in 

fact, chosen not to apply for 

membership on the Exchange. 

By way of background, an MPID is a 

four-character unique identifier that is 

approved by the Exchange and assigned 

to a Member for use on the Exchange to 

identify the Member firm on the orders 

sent to the Exchange and resulting 

executions. Members may choose to 

request more than one MPID as a unique 

identifier(s) for their transactions on the 

Exchange. The Exchange notes that a 

Member may have multiple MPIDs for 

use by separate business units and 

trading desks or to support Sponsored 

Participant 5 access. Certain members 

currently leverage multiple MPIDs to 

obtain benefits from and added value in 

their participation on the Exchange. 

Multiple MPIDs provide unique benefits 

to and efficiencies for Members by 

allowing: (1) Members to manage their 

trading activity more efficiently by 

assigning different MPIDs to different 

trading desks and/or strategies within 

the firm; and (2) Sponsoring Members 6