Federal Register / Vol. 83, No. 162 / Tuesday, August 21, 2018 / Notices 42329 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

5 DR and DT are associated with MidPoint 

Discretionary Orders (‘‘MDOs’’) that remove 

liquidity, either not within discretionary range (i.e., 

DR) or within discretionary range (i.e., DT). 

6 Id. 

7HR is associated with Non-Displayed orders that 

remove liquidity. 

8MT is associated with Non-Displayed orders 

that remove liquidity using Mid-Point Peg. 

9PT is associated with orders that remove 

liquidity from EDGA using RMPT or RMPL routing 

strategy. 

10 Destination Specific or ‘‘DIRC’’ is a routing 

option under which an order checks the System for 

available shares and then is sent to an away trading 

center or centers specified by the User. See Rule 

11.11(g)(14). 

11 IX is associated with orders routed to IEX using 

the DIRC routing strategy. 

12While MDOs may be displayed or nondisplayed, these orders contain a non-displayed 

discretionary component to execute at prices up 

(down) to and including the midpoint of the NBBO. 

See Rule 11.8(e). 

13 15 U.S.C. 78f. 

14 15 U.S.C. 78f(b)(4). 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83855; File No. SR– 

CboeEDGA–2018–014] 

Self-Regulatory Organizations; Cboe 

EDGA Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change Related to Fees 

for Use on Cboe EDGA Exchange, Inc. 

August 15, 2018. 

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 August 1, 

2018, Cboe EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA’’) 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 Exchange has 

designated the proposed rule change as 

one establishing or changing a member 

due, fee, or other charge imposed by the 

Exchange under Section 19(b)(3)(A)(ii) 

of the Act 3 and Rule 19b–4(f)(2) 

thereunder,4 which renders the 

proposed rule change effective upon 

filing with the Commission. 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 filed a proposal to 

amend the Exchange’s fee schedule 

applicable to its equities trading 

platform to: (1) Eliminate rebates 

provided to orders in securities priced 

above $1.00 that remove liquidity from 

the Exchange’s order book under fee 

codes DR, DT, HR, MT, and PT, and (2) 

increase the routing fee charged to 

orders routed to Investors Exchange LLC 

using the DIRC routing strategy under 

fee code IX. 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of the proposed rule 

change is to amend the Exchange’s fee 

schedule applicable to its equities 

trading platform (‘‘EDGA Equities’’) to: 

(1) Eliminate rebates provided to orders 

in securities priced above $1.00 that 

remove liquidity from the Exchange’s 

order book under fee codes DR,5 DT,6

HR,7 MT,8 and PT,9 and (2) increase the 

routing fee charged to orders routed to 

Investors Exchange LLC (‘‘IEX’’) using 

the DIRC10 routing strategy under fee 

code IX.11

Fee Codes DR, DT, HR, MT, and PT: 

Non-Displayed Remove Fee 

The Exchange charges fees based on 

an inverted fee structure where orders 

are provided rebates for removing 

liquidity and charged a fee for adding 

liquidity. Currently, both displayed and 

non-displayed orders in securities 

priced at or above $1.00 are provided a 

rebate of $0.00040 for removing 

liquidity. The Exchange proposes to 

eliminate the rebate for orders that 

remove liquidity from the Exchange’s 

order book under fee codes DR, DT, HR, 

MT, and PT, which all relate to liquidity 

removing orders that contain either an 

explicit non-displayed instruction or a 

non-displayed discretionary 

component.12 Orders executed under 

these fee codes will receive free 

executions instead of a rebate. 

Fee Code IX: IEX Routing Fees 

Currently, the fee schedule provides 

that orders in securities priced at or 

above $1.00 routed to IEX using the 

Destination Specific (i.e., ‘‘DIRC’’) 

routing strategy are charged a fee of 

$0.0010 per share under fee code IX. 

The Exchange proposes to increase the 

routing fee charged to orders routed to 

IEX to $0.0030 so that the Exchange can 

recoup increased costs associated with 

routing order flow to that market. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,13

in general, and furthers the objectives of 

Section 6(b)(4),14 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other persons using its facilities. 

Fee Codes DR, DT, HR, MT, and PT: 

Non-Displayed Remove Fee 

The Exchange believes that the 

proposed fees for non-displayed orders 

are reasonable. While the Exchange 

currently provides a rebate for both 

displayed and non-displayed orders that 

remove liquidity, the Exchange has 

determined to instead charge no fee for 

non-displayed orders. This change is 

designed to incentivize Members to 

enter displayed liquidity on the 

Exchange since displayed orders would 

be eligible for rebates when removing 

liquidity while non-displayed orders 

would not. Furthermore, the Exchange’s 

inverted fee structure would continue to 

incentivize liquidity takers since orders 

that remove liquidity would remain 

eligible for better pricing—including 

rebates for displayed orders and free 

executions for non-displayed orders— 

than orders that add liquidity and are 

charged a fee. In addition, the Exchange 

believes that this change is equitable 

and not unfairly discriminatory because 

the proposed taker fees would apply 

equally to all Members that choose to 

enter non-displayed orders. Members 

that would prefer to receive a rebate for 

orders that remove liquidity can utilize 

a range of displayed order types offered 

by the Exchange, thereby promoting a 

more transparent market. 

Fee Code IX: IEX Routing Fees 

As other exchanges amend the fees 

charged for accessing liquidity, the 

Exchange believes that it is appropriate 


sradovich on DSK3GMQ082PROD with NOTICES
42330 Federal Register / Vol. 83, No. 162 / Tuesday, August 21, 2018 / Notices 

15See SR–IEX–2018–16 (pending publication). 

16 15 U.S.C. 78s(b)(3)(A). 

17 17 CFR 240.19b–4(f). 

18 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

to amend its own routing fees so that it 

can recoup costs associated with routing 

orders to such away markets. The 

Exchange believes that the proposed 

fees for orders routed to IEX are 

reasonable and equitable because they 

reflect the costs associated with 

executing orders on IEX and additional 

operational expenses incurred by the 

Exchange. The Exchange is proposing to 

increase its routing fees due to an 

announced change in IEX’s fee schedule 

that would result in a significant 

increase in the transaction fees being 

charged by IEX to some orders, 

including orders routed by the 

Exchange.15 The Exchange believes that 

it is reasonable and equitable to pass 

these increased costs to Members that 

use the Exchange to route orders to that 

market. Members that do not wish to 

pay the proposed fee can send their 

routable orders directly to IEX instead of 

using routing functionality provided by 

the Exchange. The Exchange also 

believes that this change is equitable 

and not unfairly discriminatory because 

the proposed fees would apply equally 

to all Members that use the Exchange to 

route orders to IEX using the DIRC 

routing strategy. Routing through the 

Exchange is voluntary, and the 

Exchange operates in a competitive 

environment where market participants 

can readily direct order flow to 

competing venues or providers of 

routing services if they deem fee levels 

to be excessive. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will result in 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act, as amended. 

The proposed changes to the nondisplayed remove fees are designed to 

incentivize displayed liquidity, which 

the Exchange believes will benefit all 

market participants by encouraging a 

transparent and competitive market. 

Furthermore, the proposed change to 

the IEX routing fee is meant to recoup 

costs associated with executing orders 

on that market, and is therefore not 

designed to have any significant impact 

on competition. The Exchange operates 

in a highly competitive market in which 

market participants can readily direct 

their order flow to competing venues. In 

such an environment, the Exchange 

must continually review, and consider 

adjusting, its fees and rebates to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed fee 

changes reflect this competitive 

environment. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

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

of the Act16 and paragraph (f) of Rule 

19b–4 thereunder.17 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. 

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– 

CboeEDGA–2018–014 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–CboeEDGA–2018–014. 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 this 

filing will also 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–CboeEDGA–2018–014 and 

should be submitted on or before 

September 11, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–17960 Filed 8–20–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83852; File No. SR– 

CboeBZX–2018–058] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing of 

a Proposed Rule Change To Permit the 

Listing and Trading of Options That 

Overlie the Mini-SPX Index, the Russell 

2000 Index, and the Dow Jones 

Industrial Average 

August 15, 2018. 

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 August 2, 

2018, 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. 


sradovich on DSK3GMQ082PROD with NOTICES