Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices 64957 

19 15 U.S.C. 78s(b)(2). 

20 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). 

21 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 on July 3, 2023 (SR–CboeBZX–2023–047). 

On September 1, 2023, the Exchange withdrew that 

filing and submitted this proposal. 

4See e.g., The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’), General 8, Connectivity to the 

Exchange. Nasdaq and its affiliated exchanges 

charge a monthly fee of $15,000 for each 10Gb Ultra 

fiber connection to the respective exchange, which 

is analogous to the Exchange’s 10Gb physical port. 

See also New York Stock Exchange LLC, NYSE 

American LLC, NYSE Arca, Inc., NYSE Chicago 

Inc., NYSE National, Inc. Connectivity Fee 

Schedule, which provides that 10 Gb LX LCN 

Circuits (which are analogous to the Exchange’s 10 

Gb physical port) are assessed $22,000 per month, 

per port. 

5The Affiliate Exchanges are also submitting 

contemporaneous identical rule filings. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 Id. 

9 15 U.S.C. 78f(b)(4). 

10See Securities and Exchange Release No. 83429 

(June 14, 2018), 83 FR 28685 (June 20, 2018) (SR– 

CboeBZX–2018–038). 

It is therefore ordered pursuant to 

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

proposed rule change (SR–ICEEU–2023– 

018), be, and hereby is, approved.20

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–20306 Filed 9–19–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98389; File No. SR– 

CboeBZX–2023–068] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fees Schedule Related to Physical 

Port Fees 

September 14, 2023. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 1, 2023, Cboe BZX Exchange, 

Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed 

with the Securities and Exchange 

Commission (‘‘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 BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX Options’’) 

proposes to amend its Fees Schedule. 

The text of the proposed rule change is 

provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

equities/regulation/rule_filings/bzx/), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

fee schedule for its equity options 

platform (‘‘BZX Options’’) relating to 

physical connectivity fees.3

By way of background, a physical port 

is utilized by a Member or non-Member 

to connect to the Exchange at the data 

centers where the Exchange’s servers are 

located. The Exchange currently 

assesses the following physical 

connectivity fees for Members and nonMembers on a monthly basis: $2,500 per 

physical port for a 1 gigabit (‘‘Gb’’) 

circuit and $7,500 per physical port for 

a 10 Gb circuit. The Exchange proposes 

to increase the monthly fee for 10 Gb 

physical ports from $7,500 to $8,500 per 

port. The Exchange notes the proposed 

fee change better enables it to continue 

to maintain and improve its market 

technology and services and also notes 

that the proposed fee amount, even as 

amended, continues to be in line with, 

or even lower than, amounts assessed by 

other exchanges for similar 

connections.4 The physical ports may 

also be used to access the Systems for 

the following affiliate exchanges and 

only one monthly fee currently (and 

will continue) to apply per port: the 

Exchange’s equities platform (BZX 

Equities), Cboe EDGX Exchange, Inc. 

(options and equities platforms), Cboe 

BYX Exchange, Inc., Cboe EDGA 

Exchange, Inc., and Cboe C2 Exchange, 

Inc. (‘‘Affiliate Exchanges’’).5

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.6 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 7 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. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 8 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange also believes the 

proposed rule change is consistent with 

Section 6(b)(4) 9 of the Act, which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Members and other persons using its 

facilities. 

The Exchange believes the proposed 

fee change is reasonable as it reflects a 

moderate increase in physical 

connectivity fees for 10 Gb physical 

ports. Further, the current 10 Gb 

physical port fee has remained 

unchanged since June 2018.10 Since its 

last increase 5 years ago however, there 

has been notable inflation. Particularly, 

the dollar has had an average inflation 

rate of 3.9% per year between 2018 and 

today, producing a cumulative price 

increase of approximately 21.1% 

inflation since the fee for the 10 Gb 


lotter on DSK11XQN23PROD with NOTICES1
64958 Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices 

11See https://www.officialdata.org/us/inflation/

2010?amount=1. 

12See e.g., The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’), General 8, Connectivity to the 

Exchange. Nasdaq and its affiliated exchanges 

charge a monthly fee of $15,000 for each 10Gb Ultra 

fiber connection to the respective exchange, which 

is analogous to the Exchange’s 10Gb physical port. 

See also New York Stock Exchange LLC, NYSE 

American LLC, NYSE Arca, Inc., NYSE Chicago 

Inc., NYSE National, Inc. Connectivity Fee 

Schedule, which provides that 10 Gb LX LCN 

Circuits (which are analogous to the Exchange’s 10 

Gb physical port) are assessed $22,000 per month, 

per port. 

13 Id. 

14See Cboe Global Markets U.S. Options Market 

Volume Summary (June 27, 2023), available at 

https://markets.cboe.com/us/options/market_

statistics/. 

15See https://www.nyse.com/markets/americanoptions/membership#directory. 

16See https://www.nyse.com/markets/arcaoptions/membership#directory. 

17See https://www.miaxglobal.com/sites/default/ 

files/page-files/MIAX_Options_Exchange_

Members_April_2023_04282023.pdf. 

18See https://www.miaxglobal.com/sites/default/ 

files/page-files/MIAX_Pearl_Exchange_Members_

01172023_0.pdf. 

19For example, a third-party reseller may 

purchase one 10 Gb physical port from the 

Exchange and resell that connectivity to three 

different market participants who may only need 3 

Gb each and leverage the same single port. 

physical port was last modified.11

Accordingly, the Exchange believes the 

proposed fee is reasonable as it 

represents only an approximate 13% 

increase from the rates adopted five 

years ago, notwithstanding the 

cumulative rate of 21.1%. 

The Exchange also believes the 

proposed fee is reasonable as it is still 

in line with, or even lower than, 

amounts assessed by other exchanges 

for similar connections.12 As noted 

above, the proposed fee is also the same 

as is concurrently being proposed for its 

Affiliate Exchanges. Further, Members 

are able to utilize a single port to 

connect to any of the Affiliate 

Exchanges with no additional fee 

assessed for that same physical port. 

Particularly, the Exchange believes the 

proposed monthly per port fee is 

reasonable, equitable and not unfairly 

discriminatory as it is assessed only 

once, even if it connects with another 

affiliate exchange since only one port is 

being used and the Exchange does not 

wish to charge multiple fees for the 

same port. Indeed, the Exchange notes 

that several ports are in fact purchased 

and utilized across one or more of the 

Exchange’s affiliated Exchanges (and 

charged only once). 

The Exchange also believes that the 

proposed fee change is not unfairly 

discriminatory because it would be 

assessed uniformly across all market 

participants that purchase the physical 

ports. The Exchange believes increasing 

the fee for 10 Gb physical ports and 

charging a higher fee as compared to the 

1 Gb physical port is equitable as the 1 

Gb physical port is 1/10th the size of the 

10 Gb physical port and therefore does 

not offer access to many of the products 

and services offered by the Exchange 

(e.g., ability to receive certain market 

data products). Thus, the value of the 1 

Gb alternative is lower than the value of 

the 10 Gb alternative, when measured 

based on the type of Exchange access it 

offers. Moreover, market participants 

that purchase 10 Gb physical ports 

utilize the most bandwidth and 

therefore consume the most resources 

from the network. As such, the 

Exchange believes the proposed fee 

change for 10 Gb physical ports is 

reasonably and appropriately allocated. 

The Exchange also notes Members 

and non-Members will continue to 

choose the method of connectivity 

based on their specific needs and no 

broker-dealer is required to become a 

Member of, let alone connect directly to, 

the Exchange. There is also no 

regulatory requirement that any market 

participant connect to any one 

particular exchange. Moreover, direct 

connectivity is not a requirement to 

participate on the Exchange. The 

Exchange also believes substitutable 

products and services are available to 

market participants, including, among 

other things, other options exchanges 

that a market participant may connect to 

in lieu of the Exchange, indirect 

connectivity to the Exchange via a thirdparty reseller of connectivity, and/or 

trading of any options product, such as 

within the Over-the-Counter (OTC) 

markets. Indeed, there are currently 16 

registered options exchanges that trade 

options (12 of which are not affiliated 

with Cboe), some of which have similar 

or lower connectivity fees.13 Based on 

publicly available information, no single 

options exchange has more than 

approximately 19% of the market 

share.14 Further, low barriers to entry 

mean that new exchanges may rapidly 

enter the market and offer additional 

substitute platforms to further compete 

with the Exchange and the products it 

offers. For example, there are 3 

exchanges that have been added in the 

U.S. options markets in the last 5 years 

(i.e., Nasdaq MRX, LLC, MIAX Pearl, 

LLC, and MIAX Emerald LLC) and one 

additional options exchange that is 

expected to launch in 2023 (i.e., MEMX 

LLC). 

As noted above, there is no regulatory 

requirement that any market participant 

connect to any one options exchange, 

nor that any market participant connect 

at a particular connection speed or act 

in a particular capacity on the 

Exchange, or trade any particular 

product offered on an exchange. 

Moreover, membership is not a 

requirement to participate on the 

Exchange. Indeed, the Exchange is 

unaware of any one options exchange 

whose membership includes every 

registered broker-dealer. By way of 

example, while the Exchange currently 

has 61 members that trade options, Cboe 

EDGX has 51 members that trade 

options, and Cboe C2 has 52 Trading 

Permit Holders (‘‘TPHs’’) (i.e., 

members). There is also no firm that is 

a Member of BZX Options only. Further, 

based on publicly available information 

regarding a sample of the Exchange’s 

competitors, NYSE American Options 

has 71 members,15 and NYSE Arca 

Options has 69 members,16 MIAX 

Options has 46 members 17 and MIAX 

Pearl Options has 40 members.18

A market participant may submit 

orders to the Exchange via a Member 

broker or a third-party reseller of 

connectivity. The Exchange notes that 

third-party non-Members also resell 

exchange connectivity. This indirect 

connectivity is another viable 

alternative for market participants to 

trade on the Exchange without 

connecting directly to the Exchange 

(and thus not pay the Exchange’s 

connectivity fees), which alternative is 

already being used by non-Members and 

further constrains the price that the 

Exchange is able to charge for 

connectivity to its Exchange. The 

Exchange notes that it could, but 

chooses not to, preclude market 

participants from reselling its 

connectivity. The Exchange also 

chooses not to adopt fees that would be 

assessed to third-party resellers on a per 

customer basis (i.e., fee based on 

number of Members that connect to the 

Exchange indirectly via the third-party). 

Particularly, these third-party resellers 

may purchase the Exchange’s physical 

ports and resell access to such ports 

either alone or as part of a package of 

services. The Exchange notes that 

multiple Members are able to share a 

single physical port (and corresponding 

bandwidth) with other non-affiliated 

Members if purchased through a thirdparty re-seller.19 This allows resellers to 

mutualize the costs of the ports for 

market participants and provide such 

ports at a price that may be lower than 

the Exchange charges due to this 

mutualized connectivity. These thirdparty sellers may also provide an 

additional value to market participants 

as they may also manage and monitor 

these connections, and clients of these 


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Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices 64959 

20 15 U.S.C. 78s(b)(3)(A). 

21 17 CFR 240.19b–4(f). 

third-parties may also be able connect 

from the same colocation facility either 

from their own racks or using the thirdparty’s managed racks and 

infrastructure which may provide 

further cost-savings. Further, the 

Exchange does not receive any 

connectivity revenue when connectivity 

is resold by a third-party, which often 

is resold to multiple customers, some of 

whom are agency broker-dealers that 

have numerous customers of their own. 

Given the availability of third-party 

providers that also offer connectivity 

solutions, the Exchange believes 

participation on the Exchange remains 

affordable (notwithstanding the 

proposed fee change) for all market 

participants, including smaller trading 

firms that may be able to take advantage 

of lower costs that result from 

mutualized connectivity. 

Accordingly, the vigorous 

competition among national securities 

exchanges provides many alternatives 

for firms to voluntarily decide whether 

direct connectivity to the Exchange is 

appropriate and worthwhile, and as 

noted above, no broker-dealer is 

required to become a Member of the 

Exchange, let alone connect directly to 

it. In the event that a market participant 

views the Exchange’s proposed fee 

change as more or less attractive than 

the competition, that market participant 

can choose to connect to the Exchange 

indirectly or may choose not to connect 

to that exchange and connect instead to 

one or more of the other 12 non-Cboe 

affiliated options markets. Moreover, if 

the Exchange charges excessive fees, it 

may stand to lose not only connectivity 

revenues but also revenues associated 

with the execution of orders routed to 

it, and, to the extent applicable, market 

data revenues. The Exchange believes 

that this competitive dynamic imposes 

powerful restraints on the ability of any 

exchange to charge unreasonable fees 

for connectivity. Notwithstanding the 

foregoing, the Exchange still believes 

that the proposed fee increase is 

reasonable, equitably allocated and not 

unfairly discriminatory, even for market 

participants that determine to connect 

directly to the Exchange for business 

purposes, as those business reasons 

should presumably result in revenue 

capable of covering the proposed 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 

proposed fee change will not impact 

intramarket competition because it will 

apply to all similarly situated Members 

equally (i.e., all market participants that 

choose to purchase the 10 Gb physical 

port). Additionally, the Exchange does 

not believe its proposed pricing will 

impose a barrier to entry to smaller 

participants and notes that its proposed 

connectivity pricing is associated with 

relative usage of the various market 

participants. For example, market 

participants with modest capacity needs 

can continue to buy the less expensive 

1 Gb physical port (which cost is not 

changing) or may choose to obtain 

access via a third-party re-seller. While 

pricing may be increased for the larger 

capacity physical ports, such options 

provide far more capacity and are 

purchased by those that consume more 

resources from the network. 

Accordingly, the proposed connectivity 

fees do not favor certain categories of 

market participants in a manner that 

would impose a burden on competition; 

rather, the allocation reflects the 

network resources consumed by the 

various size of market participants— 

lowest bandwidth consuming members 

pay the least, and highest bandwidth 

consuming members pays the most. 

The Exchange’s proposed fee is also 

still lower than some fees for similar 

connectivity on other exchanges and 

therefore may stimulate intermarket 

competition by attracting additional 

firms to connect to the Exchange or at 

least should not deter interested 

participants from connecting directly to 

the Exchange. Further, if the changes 

proposed herein are unattractive to 

market participants, the Exchange can, 

and likely will, see a decline in 

connectivity via 10 Gb physical ports as 

a result. The Exchange operates in a 

highly competitive market in which 

market participants can determine 

whether or not to connect directly to the 

Exchange based on the value received 

compared to the cost of doing so. 

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 20 and paragraph (f) of Rule 

19b–4 21 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CboeBZX–2023–068 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–2023–068. 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 (https://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 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 


lotter on DSK11XQN23PROD with NOTICES1
64960 Federal Register / Vol. 88, No. 181 / Wednesday, September 20, 2023 / Notices 

22 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 on July 3, 2023 (SR–CboeEDGX–2023–044). 

On September 1, 2023, the Exchange withdrew that 

filing and submitted this proposal. 

4See e.g., The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’), General 8, Connectivity to the 

Exchange. Nasdaq and its affiliated exchanges 

charge a monthly fee of $15,000 for each 10Gb Ultra 

fiber connection to the respective exchange, which 

is analogous to the Exchange’s 10Gb physical port. 

See also New York Stock Exchange LLC, NYSE 

American LLC, NYSE Arca, Inc., NYSE Chicago 

Inc., NYSE National, Inc. Connectivity Fee 

Schedule, which provides that 10 Gb LX LCN 

Circuits (which are analogous to the Exchange’s 10 

Gb physical port) are assessed $22,000 per month, 

per port. 

5The Affiliate Exchanges are also submitting 

contemporaneous identical rule filings. 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 Id. 

9 15 U.S.C. 78f(b)(4). 

10See Securities and Exchange Release No. 83450 

(June 15, 2018), 83 FR 28884 (June 21, 2018) (SR– 

CboeEDGX–2018–016). 

11See https://www.officialdata.org/us/inflation/

2010?amount=1. 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CboeBZX–2023–068 and should be 

submitted on or before October 11, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–20308 Filed 9–19–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–98396; File No. SR– 

CboeEDGX–2023–057] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fees Schedule Related to Physical 

Port Fees 

September 14, 2023. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on 

September 1, 2023, Cboe EDGX 

Exchange, Inc. (the ‘‘Exchange’’ or 

‘‘EDGX’’) filed with the Securities and 

Exchange Commission (‘‘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 Equities’’) 

proposes to amend its Fees Schedule. 

The text of the proposed rule change is 

provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://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 relating to physical 

connectivity fees.3

By way of background, a physical port 

is utilized by a Member or non-Member 

to connect to the Exchange at the data 

centers where the Exchange’s servers are 

located. The Exchange currently 

assesses the following physical 

connectivity fees for Members and nonMembers on a monthly basis: $2,500 per 

physical port for a 1 gigabit (‘‘Gb’’) 

circuit and $7,500 per physical port for 

a 10 Gb circuit. The Exchange proposes 

to increase the monthly fee for 10 Gb 

physical ports from $7,500 to $8,500 per 

port. The Exchange notes the proposed 

fee change better enables it to continue 

to maintain and improve its market 

technology and services and also notes 

that the proposed fee amount, even as 

amended, continues to be in line with, 

or even lower than, amounts assessed by 

other exchanges for similar 

connections.4 The physical ports may 

also be used to access the Systems for 

the following affiliate exchanges and 

only one monthly fee currently (and 

will continue) to apply per port: the 

Exchange’s options platform (EDGX 

Options), Cboe BZX Exchange, Inc. 

(options and equities platforms), Cboe 

BYX Exchange, Inc., Cboe EDGA 

Exchange, Inc., and Cboe C2 Exchange, 

Inc. (‘‘Affiliate Exchanges’’).5

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.6 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 7 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. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 8 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange also believes the 

proposed rule change is consistent with 

Section 6(b)(4) 9 of the Act, which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Members and other persons using its 

facilities. 

The Exchange believes the proposed 

fee change is reasonable as it reflects a 

moderate increase in physical 

connectivity fees for 10 Gb physical 

ports. Further, the current 10 Gb 

physical port fee has remained 

unchanged since June 2018.10 Since its 

last increase 5 years ago however, there 

has been notable inflation. Particularly, 

the dollar has had an average inflation 

rate of 3.9% per year between 2018 and 

today, producing a cumulative price 

increase of approximately 21.1% 

inflation since the fee for the 10 Gb 

physical port was last modified.11


lotter on DSK11XQN23PROD with NOTICES1