9406 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Notices 

14 17 CFR 240.17Ad–22(e)(13). 

15 15 U.S.C. 78q–1(b)(3)(F). 

16 17 CFR 240.17Ad–22(e)(2)(i), (e)(2)(v), and 

(e)(13). 

17 15 U.S.C. 78s(b)(2). 

18 In approving the proposed rule change, the 

Commission considered the proposal’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

19 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

participate in the testing and review of 

its default procedures, including any 

close-out procedure, at least annually 

and following material changes thereto. 

By amending the Default Management 

Procedures to document and formalize 

the procedures for convening the CDS 

Default Committee remotely by 

teleconference, the proposed rule 

change would promote ICC’s ability to 

efficiently and safely manage its closeout process when the CDS Default 

Committee cannot meet in person, 

which would help to ensure that ICC 

has the authority and operational 

capacity to take timely action to contain 

losses and liquidity demands and 

continue to meet its obligations in the 

event of default. In addition, the 

Commission believes the proposed 

updates and clarification changes to the 

default notification procedures would 

ensure that ICC’s relevant stakeholders 

stay informed throughout the default 

management process and enable them to 

provide responsive feedback that may 

also help ICC to take timely action to 

contain losses and liquidity demands 

while meeting its obligations. For these 

reasons, the Commission finds that the 

proposed rule change is consistent with 

Rule 17Ad–22(e)(13).14

IV. Conclusion 

On the basis of the foregoing, the 

Commission finds that the proposed 

rule change is consistent with the 

requirements of the Act, and in 

particular, with the requirements of 

Section 17A(b)(3)(F) of the Act 15 and 

Rules 17Ad–22(e)(2)(i), (e)(2)(v), and 

(e)(13) thereunder.16

It is therefore ordered pursuant to 

Section 19(b)(2) of the Act 17 that the 

proposed rule change (SR–ICC–2020– 

014) be, and hereby is, approved.18

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02868 Filed 2–11–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–104, OMB Control No. 

3235–0119] 

Proposed Collection; Comment 

Request 

Upon Written Request Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736. 

Extension: 

Rule 12g3–2 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Rule 12g3–2 (17 CFR 240.12g3–2) 

under the Securities Exchange Act of 

1934 (the ‘‘Exchange Act’’) provides an 

exemption from Section 12(g) of the 

Exchange Act (15 U.S.C. 78l(g)) for 

foreign private issuers. Rule 12g3–2 is 

designed to provide investors in foreign 

securities with information about such 

securities and the foreign issuer. The 

information filed under Rule 12g3–2 

must be filed with the Commission and 

is publicly available. We estimate that it 

takes 8.95 hours per response to prepare 

and is filed by approximately 1,386 

respondents. Each respondent files an 

estimated 12 times submissions 

pursuant to Rule 12g3–2 per year for a 

total of 16,632 respondents. We estimate 

that 25% of 8.95 hours per response 

(2.237 hours per response) to provide 

the information required under Rule 

12g3–2 for a total annual reporting 

burden of 37,206 hours (2.237 hours per 

response × 16,632 responses). 

Written comments are invited on: (a) 

Whether this proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden imposed by the collection 

of information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; 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. 

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 

control number. 

Please direct your written comment to 

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. 

Dated: February 8, 2021. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02865 Filed 2–11–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91078; File No. SR– 

CboeEDGX–2021–009] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change Relating To 

Amend the Fee Schedule 

February 8, 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 February 

1, 2021, Cboe EDGX Exchange, Inc. (the 

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

‘‘Exchange’’ or ‘‘EDGX’’) is filing with 

the Securities and Exchange 

Commission (‘‘Commission’’) a 

proposed rule change to amend the fee 

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://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. 

Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Notices 9407 

3See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (January 25, 

2021), available at https://markets.cboe.com/us/ 

equities/market_statistics/. 

4Appended to orders that add liquidity to EDGX 

(Tape B) and offers a rebate of $0.0016 per share. 

5Appended to orders that add liquidity to EDGX 

(Tape A) and offers a rebate of $0.0016 per share. 

6Appended to orders that add liquidity to EDGX 

(Tape C) and offers a rebate of $0.0016 per share. 

7Appended to orders that add liquidity to EDGX 

pre and post market (Tape A or C) and offers a 

rebate of $0.0016 per share. 

8Appended to orders that add liquidity to EDGX 

pre and post market (Tape B) and offers a rebate of 

$0.0016 per share. 

9 ‘‘Step-Up Add TCV’’ means ADAV as a 

percentage of TCV in the relevant baseline month 

subtracted from current ADAV as a percentage of 

TCV. ‘‘TCV’’ means total consolidated volume 

calculated as the volume reported by all exchanges 

and trade reporting facilities to a consolidated 

transaction reporting plan for the month for which 

the fees apply. ‘‘ADAV’’ means ADAV means 

average daily added volume calculated as the 

number of shares added per day. ADAV is 

calculated on a monthly basis. 

10Appended to Retail Orders that add liquidity to 

EDGX and offers a rebate of $0.0032 per share. 

11 ‘‘ADV’’ means average daily volume calculated 

as the number of shares added to, removed from, 

or routed by, the Exchange, or any combination or 

subset thereof, per day. ADV is calculated on a 

monthly basis. 

12Appended to orders that add liquidity using 

MidPoint Discretionary order within discretionary 

range and are provided a rebate of $0.00100. 

13Appended to non-displayed orders that add 

liquidity and are provided a rebate of $0.00100. 

14Appended to non-displayed orders that add 

liquidity using Mid-Point Peg and are provided a 

rebate of $0.00100. 

15Appended to non-displayed orders that add 

liquidity using Supplemental Peg and are provided 

a rebate of $0.00100. 

16 ‘‘ADAV’’ means ADAV means average daily 

added volume calculated as the number of shares 

added per day. ADAV is calculated on a monthly 

basis. 

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 applicable to its equities 

trading platform (‘‘EDGX Equities’’) by 

amending its Add/Remove Volume 

Tiers, effective February 1, 2021. 

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,3 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 in particular operates a 

‘‘Maker-Taker’’ model whereby it pays 

credits to members that provide 

liquidity and assesses fees to those that 

remove liquidity. The Exchange’s fee 

schedule sets forth the standard rebates 

and rates applied per share for orders 

that provide and remove liquidity, 

respectively. Currently, for orders 

priced at or above $1.00, the Exchange 

provides a standard rebate of $0.0016 

per share for orders that add liquidity 

and assesses a fee of $0.0027 per share 

for orders that remove liquidity. For 

orders priced below $1.00, the Exchange 

[sic] a standard rebate of $0.00009 per 

share for orders that add liquidity and 

assesses a fee of 0.30% of Dollar Value 

for orders that remove liquidity. 

Additionally, in response to the 

competitive environment, the Exchange 

also offers tiered pricing which provides 

Members opportunities to qualify for 

higher rebates or reduced fees where 

certain volume criteria and thresholds 

are met. Tiered pricing provides an 

incremental incentive for Members to 

strive for higher tier levels, which 

provides increasingly higher benefits or 

discounts for satisfying increasingly 

more stringent criteria. 

Currently, the Exchange provides for 

certain Add/Remove Volume Tiers 

under footnote 1 of the Fee Schedule. 

More specifically, the Add/Remove 

Volume Tiers provide for seven 

different volume tiers that offer 

enhanced rebates on Members’ orders 

yielding fee codes ‘‘B’’ 4, ‘‘V’’ 5, ‘‘Y’’ 6, 

‘‘3’’ 7 and ‘‘4’’ 8, where a Member 

reaches certain volume-based criteria 

offered in each tier. Two of these tiers 

are ‘‘Growth Tiers’’, which are designed 

to encourage growth in order flow by 

providing specific criteria in which 

Members must increase their relative 

liquidity each month over a 

predetermined baseline. Growth Tier 2, 

for example, provides an enhanced 

rebate of $0.0027 on qualifying orders 

(i.e., B, V, Y, 3 and 4) where a Member 

has a Retail Step-Up Add TCV 9 (i.e., 

yielding fee code ZA) 10 from May 2020 

that is greater than or equal to 0.10%. 

The Exchange now proposes to amend 

Growth Tier 2 to provide an increased 

enhanced rebated of $0.0030 on 

qualifying orders where a Member: (1) 

Has a Step-Up Add TCV from January 

2021 greater than or equal to 0.10%; (2) 

adds an ADV 11 greater than or equal to 

0.50% of the TCV; and (3) removes an 

ADV of greater than or equal to 0.80% 

of the TCV. 

Additionally, under the Add/Remove 

Volume Tiers in footnote 1 of the Fee 

Schedule, the Exchange also provides 

for three Non-Displayed Add Volume 

Tiers, which offer enhanced rebates on 

Members’ orders yielding fee codes 

‘‘DM’’ 12, ‘‘HA’’ 13, ‘‘MM’’ 14 and ‘‘RP’’ 15

where a Member reaches certain 

required volume-based criteria offered 

in each tier. For example, NonDisplayed Add Volume Tier 3 provides 

an enhanced rebated of $0.0025 on 

qualifying orders (i.e., DM, HA, MM and 

RP) where a Member has an ADAV 16 of 

greater than or equal to 0.10% of TCV 

for Non-Displayed orders that yield fee 

codes DM, HA, HI, MM or RP. The 

Exchange now proposes to add a new 

Non-Displayed tier, specifically, a NonDisplayed Step-Up Tier, which provides 

an enhanced rebate of $0.0025 where a 

Member: (1) Has a Step-Up Add TCV 

from January 2021 greater than or equal 

to 0.10%; (2) adds an ADV greater than 

or equal to 0.50% of the TCV; and (3) 

removes an ADV of greater than or equal 

to 0.80% of the TCV. 

Growth Tier 2, as amended, and the 

new Non-Displayed Step-Up Tier, both 

of which offer the same three-pronged 

criteria, are designed to incentivize 

overall order flow, particularly by 

offering enhanced rebates for both 

displayed (i.e., B, V, Y, 3 and 4) and 

non-displayed (DM, HA, MM and RP) 

orders if a Member meets the different, 

incrementally more difficult criteria as 

amended in Growth Tier 2 or the 

additional opportunity as provided in 

the proposed Non-Displayed Step-Up 

Tier. Specifically the proposed criteria 

will encourage a Member to: (1) Grow in 

overall order flow (by providing criteria 

in which a Member must increase 

relative overall order flow, not just retail 

order flow, each month over baseline 

liquidity in January 2021); (2) increase 

9408 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Notices 

17 15 U.S.C. 78f. 

18 15 U.S.C. 78f(b)(4). 

19 15 U.S.C. 78f.(b)(5). 

20 See e.g., Nasdaq PSX Price List [sic], Rebate to 

Add Displayed Liquidity (Per Share Executed), and 

Rebate to Add Other Non-Displayed Liquidity, 

which provide rebates to members for adding 

displayed and non-displayed liquidity over certain 

thresholds of TCV ranging between $0.00075 and 

$0.00305, available at http://nasdaqtrader.com/ 

Trader.aspx?id=PriceListTrading2; and Cboe BZX 

U.S. Equities Exchange Fee Schedule, Footnote 1, 

Add Volume Tiers, which provides similar 

incentives for displayed and non-displayed 

liquidity and offers rebates ranging between 

$0.0018 and $0.0031. 

21See generally, Cboe EDGX U.S. Equities 

Exchange Fee Schedule, Footnote 1, Add Volume 

Tiers [sic]. 

22See supra note 20. 

liquidity adding volume; and (3) 

increase in liquidity removing volume, 

in order to receive the proposed 

enhanced rebates. Overall, the proposed 

criteria and enhanced rebates provide 

an additional opportunity for Members 

to submit more order flow inclusive of 

all orders, liquidity adding Members on 

the Exchange to contribute to a deeper, 

more liquid market, and liquidity 

executing Members on the Exchange to 

increase transactions and take execution 

opportunities provided by such 

increased liquidity, together providing 

for overall enhanced price discovery 

and price improvement opportunities 

on the Exchange. As such, increased 

overall order flow benefits all Members 

by contributing towards a robust and 

well-balanced market ecosystem. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,17

in general, and furthers the objectives of 

Section 6(b)(4),18 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its Members, 

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) 19 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. 

As described above, the Exchange 

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. The 

proposed rule change reflects a 

competitive pricing structure designed 

to incentivize market participants to 

direct their order flow to the Exchange, 

which the Exchange believes would 

enhance market quality to the benefit of 

all Members. In particular, the Exchange 

believes the proposed changes to 

Growth Tier 2 and the proposed new 

Non-Displayed Step-Up Tier are 

reasonable because they either amend 

an existing opportunity or provide an 

additional opportunity for Members to 

receive an enhanced rebate on 

qualifying orders by means of overall 

order flow, including both liquidity 

adding and removing orders. The 

Exchange notes that relative volumebased incentives and discounts have 

been widely adopted by exchanges,20

including the Exchange,21 and are 

reasonable, equitable and nondiscriminatory because they are open to 

all members on an equal basis and 

provide additional benefits or discounts 

that are reasonably related to (i) the 

value to an exchange’s market quality 

and (ii) associated higher levels of 

market activity, such as higher levels of 

liquidity provision and/or growth 

patterns. Additionally, as noted above, 

the Exchange operates in a highly 

competitive market. The Exchange is 

only one of several equity venues to 

which market participants may direct 

their order flow, and it represents a 

small percentage of the overall market. 

It is also only one of several maker-taker 

exchanges. Competing equity exchanges 

offer similar tiered pricing structures to 

that of the Exchange, including 

schedules of rebates and fees that apply 

based upon members achieving certain 

volume and/or growth thresholds. These 

competing pricing schedules, moreover, 

are presently comparable to those that 

the Exchange provides, including the 

pricing of comparable tiers.22

Moreover, the Exchange believes the 

two proposed tiers are a reasonable 

means to encourage overall growth in 

Members’ overall order flow to the 

Exchange and to incentivize Members to 

continue to provide liquidity adding 

and liquidity removing to the Exchange 

by offering them a different or 

additional opportunity than those 

opportunities currently under the Add/ 

Remove Volume Tiers to receive an 

enhanced rebate on qualifying orders. 

The Exchange believes that the 

proposed tiers, each based on a 

Member’s overall growth in all order 

flow and their liquidity adding and 

removing orders, will generally benefit 

all market participants by incentivizing 

continuous liquidity and thus, deeper 

more liquid markets as well as increased 

execution opportunities. Indeed, the 

Exchange notes that greater add volume 

order flow may provide for deeper, more 

liquid markets and execution 

opportunities, and greater remove 

volume order flow may increase 

transactions on the Exchange, which the 

Exchange believes incentivizes liquidity 

providers to submit additional liquidity 

and execution opportunities, thus, 

providing an overall increase in price 

discovery and transparency on the 

Exchange. 

Further, the Exchange believes that 

the proposed rule changes are 

reasonable as they do not represent a 

significant departure from the current 

criteria or enhanced rebates currently 

offered in the Fee Schedule. First, the 

Exchange believes that modifying 

existing criteria in Growth Tier 2 is 

reasonably designed to be incrementally 

more difficult to achieve than the 

current criteria and therefore is 

commensurate with the proposed 

increased enhanced rebate. The 

Exchange also believes that the 

proposed criteria and enhanced rebate 

remains in line with the incremental 

increase in difficulty from Growth Tier 

1. Growth Tier 1 may be met if a 

Member: (1) Adds an ADV greater than 

or equal to 0.20% of the TCV; and (2) 

has a Step-Up Add TCV from March 

2019 of greater than or equal to 0.10%., 

whereas proposed Growth Tier 2 

provides for an additional prong of 

criteria, as well as modestly increased 

percentages of ADV over TCV, that a 

Member must meet to receive an 

enhanced rebate. Second, the Exchange 

believes that the proposed criteria in the 

new Non-Displayed Step-Up Tier is of 

comparable difficulty to the criteria in 

Non-Displayed Add Volume Tier 3, 

which offers the same enhanced rebate 

for the same qualifying orders if a 

Member has an ADAV greater than or 

equal to 0.10% of TCV for NonDisplayed orders that yield fee codes 

DM, HA, HI, MM or RP. The Exchange 

notes that the sum of Non-Displayed 

orders only as an add-volume (ADAV) 

percentage presents a more narrow, thus 

comparable in difficulty, type of order 

flow that a Member must submit to 

achieve the criteria in Non-Displayed 

Add Volume Tier 3, and therefore, the 

proposed enhanced rebate offered under 

the Non-Displayed Step-Up Tier is 

commensurate with the same enhanced 

Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Notices 9409 

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

24 17 CFR 240.19b–4(f). 

rebate offered under Non-Displayed 

Add Volume Tier 3. 

The Exchange believes that the 

proposal represents an equitable 

allocation of fees and rebates and is not 

unfairly discriminatory because all 

Members will continue to be eligible for 

Growth Tier 2, as amended, and all 

Members will be eligible for proposed 

Non-Displayed Step-Up Tier. All 

Members will have the opportunity to 

meet the two tiers’ criteria and will 

receive the proposed corresponding 

enhanced rebates for their respective 

qualifying orders if they meet such 

criteria. Without having a view of 

activity on other markets and offexchange venues, the Exchange has no 

way of knowing whether this proposed 

rule change would definitely result in 

any Members qualifying for the 

proposed tiers. While the Exchange has 

no way of predicting with certainty how 

the proposed tier will impact Member 

activity, the Exchange anticipates that at 

least three Members will be able to 

compete for and reach the proposed 

criteria in Growth Tier 2 and the NonDisplayed Step-Up Tier. The Exchange 

anticipates that multiple Member types 

will compete to reach the proposed 

tiers, broker-dealers and liquidity 

providers, each providing distinct types 

of order flow to the Exchange to the 

benefit of all market participants. The 

Exchange also notes that proposed tiers 

will not adversely impact any Member’s 

pricing or ability to qualify for other 

reduced fee or enhanced rebate tiers. 

Should a Member not meet the 

proposed criteria under either of the 

proposed tiers, the Member will merely 

not receive that corresponding 

enhanced rebate. Furthermore, the 

proposed enhanced rebates in Growth 

Tier 2 and the Non-Displayed Step-Up 

Tier will each automatically and 

uniformly apply to all Members’ 

qualifying orders for all Members that 

meet the required criteria under the 

proposed tiers. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. Rather, as 

discussed above, the Exchange believes 

that the proposed change would 

encourage the submission of additional 

order flow to a public exchange, thereby 

promoting market depth, execution 

incentives and enhanced execution 

opportunities, as well as price discovery 

and transparency for all Members. As a 

result, the Exchange believes that the 

proposed change furthers the 

Commission’s goal in adopting 

Regulation NMS of fostering 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 

The Exchange believes the proposed 

rule change does not impose any burden 

on intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Particularly, 

the proposed change applies to all 

Members equally in that all Members 

are eligible for the proposed Growth 

Tier and Non-Displayed Step-Up Tier, 

have a reasonable opportunity to meet 

the tiers’ criteria and will all 

automatically and uniformly receive the 

corresponding enhanced rebate on their 

respective qualifying orders if such 

criteria is met. Additionally, the 

proposed tiers are designed to attract 

additional overall order flow to the 

Exchange. The Exchange believes that 

the amended and additional tier criteria 

would incentivize market participants 

to grow their overall order flow 

submitted to the Exchange, both 

liquidity adding and removing order 

flow, bringing with it improved price 

transparency. The Exchange believes 

greater overall order flow and pricing 

transparency benefits all market 

participants on the Exchange by 

providing more trading opportunities, 

enhancing market quality, and 

continuing to encourage Members to 

send orders, thereby contributing 

towards a robust and well-balanced 

market ecosystem, which benefits all 

market participants. 

The Exchange believes the proposed 

rule change does not impose any burden 

on intermarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. As 

previously discussed, the Exchange 

operates in a highly competitive market. 

Members have numerous alternative 

venues that they may participate on and 

direct their order flow, including 15 

other equities exchanges and offexchange venues and alternative trading 

systems. Additionally, the Exchange 

represents a small percentage of the 

overall market. Based on publicly 

available information, no single equities 

exchange has more than 16% of the 

market share. Therefore, no exchange 

possesses significant pricing power in 

the execution of 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.’’ 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’. . . .’’. 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 has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 23 and paragraph (f) of Rule 

19b–4 24 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. 

9410 Federal Register / Vol. 86, No. 28 / Friday, February 12, 2021 / Notices 

25 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Notice of Filing infra note 4, 85 FR at 85788. 

4Securities Exchange Act Release No. 34–90763 

(Dec. 21, 2020), 85 FR 85788 (Dec. 29, 2020) (File 

No. SR–OCC–2020–016) (‘‘Notice of Filing’’). 

5See Securities Exchange Act Release No. 82473 

(Jan. 9, 2018), 83 FR 2271 (Jan. 16, 2018) (File No. 

SR–OCC–2017–011), which describes how OCC 

periodically reviews the parameters and 

assumptions used by STANS pursuant to its Model 

Risk Management Policy and in accordance with 17 

CFR 240.17Ad–22(e)(6). 

6 15 U.S.C. 78s(b)(1) and 17 CFR 240.19b–4. 

7See Securities Exchange Act Release No. 74966 

(May 14, 2015), 80 FR 29784 (May 22, 2015) (File 

No. SR–OCC–2015–010); Securities Exchange Act 

Release No. 76128 (Dec. 28, 2015), 81 FR 135 (Jan. 

4, 2016) (File No. SR–OCC–2015–016); Securities 

Exchange Act Release No. 79818 (Jan. 18, 2017), 82 

FR 8455 (Jan. 25, 2017) (File No. SR–OCC–2017– 

001); Securities Exchange Act Release No. 82161 

(Nov. 28, 2017), 82 FR 57306 (Dec. 4, 2017) (File 

No. SR–OCC–2017–022); Securities Exchange Act 

Release No. 84524 (Nov. 2, 2018), 83 FR 55918 

(Nov. 8, 2018) (File No. SR–OCC–2018–014); 

Securities Exchange Act Release No. 85440 (Mar. 

28, 2019), 84 FR 13082 (Apr. 3, 2019) (File No. SR– 

OCC–2019–002); Securities Exchange Act Release 

No. 85755 (Apr. 30, 2019), 87 FR 19815 (May 6, 

2019) (File No. SR–OCC–2019–004); Securities 

Exchange Act Release No. 86296 (Jul. 3, 2019), 84 

FR 32816 (Jul. 9, 2019) (File No. SR–OCC–2019– 

005); Securities Exchange Act Release No. 87387 

(Oct. 23, 2019), 84 FR 57890 (Oct. 29, 2019) (File 

No. SR–OCC–2019–010); Securities Exchange Act 

Release No. 89392 (Jul. 24, 2020), 85 FR 45938 (Jul. 

30,2020) (File No. SR–OCC–2020–007); Securities 

Exchange Act Release No. 90139 (Oct. 8, 2020), 85 

FR 65886 (Oct. 16, 2020) (File No. SR– OCC–2020– 

012). 

8See id. 

9OCC also proposes conforming changes to its 

Margin Policy. 

10See Notice of Filing, 85 FR at 85789. 

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– 

CboeEDGX–2021–009 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–CboeEDGX–2021–009. 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–CboeEDGX–2021–009 and 

should be submitted on or before March 

5, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–02857 Filed 2–11–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–91079; File No. SR–OCC– 

2020–016] 

Self-Regulatory Organizations; The 

Options Clearing Corporation; Order 

Approving Proposed Rule Change to 

Concerning the Options Clearing 

Corporation’s System for Theoretical 

Analysis and Numerical Simulation 

(‘‘STANS’’) Methodology 

Documentation 

February 8, 2021. 

I. Introduction 

On December 9, 2020, the Options 

Clearing Corporation (‘‘OCC’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change SR–OCC–2020– 

016 (‘‘Proposed Rule Change’’) pursuant 

to Section 19(b) of the Securities 

Exchange Act of 1934 (‘‘Exchange 

Act’’) 1 and Rule 19b–4 2 thereunder to 

adopt a new document describing OCC’s 

system for calculating daily and intraday margin requirements for its Clearing 

Members.3 The Proposed Rule Change 

was published for public comment in 

the Federal Register on December 29, 

2020.4 The Commission has received no 

comments regarding the Proposed Rule 

Change. This order approves the 

Proposed Rule Change. 

II. Background 

To manage the credit risk posed by its 

Clearing Members, OCC collects margin 

collateral both daily and intraday. OCC 

uses its System for Theoretical Analysis 

and Numerical Simulation (‘‘STANS’’) 

to set risk-based margin requirements 

for its Clearing Members. The margin 

requirements calculated using STANS 

consist of an estimate of a 99 percent 

expected shortfall (‘‘ES’’) over a two-day 

time horizon with additional charges for 

model risk, stress tests, liquidation 

costs, and various add-ons. 

OCC maintains technical 

documentation that describes how the 

various quantitative components of 

STANS were developed and operate, 

including the various parameters and 

assumptions contained within those 

components 5 and the mathematical 

theories underlying the selection of 

those quantitative methods (‘‘Model 

Whitepapers’’). The Model Whitepapers 

are currently synthesized in a single 

document, the Margins Methodology, 

describing how STANS operates from 

end to end. Pursuant to section 19(b) of 

the Exchange Act and Rule 19b–4 

thereunder,6 OCC has filed, and the 

Commission has approved, sections of 

OCC’s Margins Methodology as rules in 

the past.7 OCC has not, however, filed 

the Margins Methodology in its entirety. 

Additionally, OCC has requested 

confidential treatment for those sections 

of the Margins Methodology that it has 

filed with the Commission.8

OCC now proposes to replace the 

Margins Methodology in its entirety 

(both sections that have and have not 

been filed as rules) with a description of 

OCC’s system for calculating daily and 

intra-day margin requirements for its 

Clearing Members (the ‘‘STANS 

Methodology Description’’).9 OCC stated 

that the proposed STANS Methodology 

Description includes the material 

aspects of OCC’s risk-based margin 

system.10 OCC intends to make the 

proposed STANS Methodology