87012 Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Notices 

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

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

subscribe. The proposed fees would 

apply to all co-location customers on a 

non-discriminatory basis, and therefore 

are not designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange also believes that the 

proposed changes to include specific 

installation fees promote just and 

equitable principles of trade and remove 

impediments to and perfect the 

mechanism of a free and open market 

and a national market system because 

the proposed rule changes will provide 

greater clarity to Members and the 

public regarding the Exchange’s fees. It 

is in the public interest for rules to be 

accurate and transparent so as to 

eliminate the potential for confusion. 

If the Exchange is incorrect in its 

determination that the proposed fees 

reflect the value of the GPS antenna, 

customers will not purchase the product 

or will seek other options at their 

disposal, such as purchasing time 

synchronization services from thirdparty vendors. 

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 not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

In terms of inter-market competition 

(the competition among self-regulatory 

organizations), the Exchange notes that 

it operates in a highly competitive 

market in which market participants can 

readily favor competing venues if they 

deem fee levels at a particular venue to 

be excessive. In such an environment, 

the Exchange must continually adjust its 

fees to remain competitive with other 

exchanges and with alternative trading 

systems that have been exempted from 

compliance with the statutory standards 

applicable to exchanges. Because 

competitors are free to modify their own 

fees in response, the Exchange believes 

that the degree to which fee changes in 

this market may impose any burden on 

competition is extremely limited. 

Approval of the proposal does not 

impose any burden on the ability of 

other exchanges to compete. As noted 

above, time synchronization services are 

offered by other vendors and any 

exchange has the ability to offer such 

services if it so chooses. 

Nothing in the proposal burdens 

intra-market competition (the 

competition among consumers of 

exchange data) because the GPS antenna 

is available to any co-location customer 

under the same fees as any other colocation customer, and any co-location 

customer that wishes to purchase a GPS 

antenna can do so on a nondiscriminatory basis. 

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)(ii) of the Act.19 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: (i) 

necessary or appropriate in the public 

interest; (ii) for the protection of 

investors; or (iii) otherwise in 

furtherance of the purposes of the 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 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–MRX–2023–24 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–MRX–2023–24. 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 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–MRX–2023–24 and should be 

submitted on or before January 5, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27526 Filed 12–14–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99132; File No. SR– 

CboeEDGX–2023–078] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule 

December 11, 2023. 

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 December 

8, 2023, Cboe EDGX Exchange, Inc. 

(‘‘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. 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Notices 87013 

3The Exchange initially filed the proposed fee 

change on December 1, 2023 (SR–CboeEDGX–2023– 

074). On December 8, 2023, the Exchange withdrew 

that filing and submitted SR–CboeEDGX–2023–077. 

On December 8, 2023, the Exchange withdrew that 

filing and submitted this proposal. 

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

Volume Summary, Month-to-Date (November 28, 

2023), available at https://www.cboe.com/us/ 

equities/market_statistics/. 

5See EDGX Equities Fee Schedule, Standard 

Rates. 

6 Id. 

7Fee code B is appended to orders adding 

liquidity to EDGX in Tape B securities. 

8Fee code V is appended to orders adding 

liquidity to EDGX in Tape A securities. 

9Fee code Y is appended to orders adding 

liquidity to EDGX in Tape C securities. 

10Fee code 3 is appended to orders adding 

liquidity to EDGX in the pre and post market in 

Tapes A or C securities. 

11Fee code 4 is appended to orders adding 

liquidity to EDGX in the pre and post market in 

Tape B securities. 

12The Exchange notes that unless otherwise 

noted on the fee schedule, enhanced rebates or 

reduced fees offered under footnote 1 are only 

available to securities priced at or above $1.00. 

13 ‘‘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. 

14 ‘‘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. 

15The Exchange notes that it also proposes to add 

a definition for Hidden, Primary Peg ADV to the 

Definitions section of the fee schedule, ‘‘Hidden, 

Primary Peg ADV’’ means ADV in non-displayed 

orders that include a Primary Peg instruction as 

defined in EDGX Equities Rule 11.6(j)(2). 

16Fee code DM is appended to orders adding 

liquidity to EDGX using MidPoint Discretionary 

order within discretionary range. 

17Fee code MM is appended to non-displayed 

orders adding liquidity to EDGX using Mid-Point 

Peg. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe EDGX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGX’’) proposes to 

amend its Fee Schedule. The text of the 

proposed rule change is provided in 

Exhibit 5. 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 applicable to its equities 

trading platform (‘‘EDGX Equities’’) as 

follows: (1) by introducing Add Volume 

Tier 7; (2) by modifying the Market 

Quality Tier; (3) by introducing a new 

Non-Displayed Add Volume Tier; (4) by 

modifying Remove Volume Tier 3; and 

(5) by introducing a new Retail Volume 

Tier. The Exchange proposes to 

implement these changes effective 

December 1, 2023.3

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 Securities 

Exchange Act of 1934 (the ‘‘Act’’), to 

which market participants may direct 

their order flow. Based on publicly 

available information,4 no single 

registered equities exchange has more 

than 14% 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 

rebates to members that add 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 in securities priced 

at or above $1.00, the Exchange 

provides a standard rebate of $0.00160 

per share for orders that add liquidity 

and assesses a fee of $0.0030 per share 

for orders that remove liquidity.5 For 

orders in securities priced below $1.00, 

the Exchange provides a standard rebate 

of $0.00009 per share for orders that add 

liquidity and assesses a fee of 0.30% of 

the total dollar value for orders that 

remove liquidity.6 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. 

Add Volume & Market Quality Tiers 

Under footnote 1 of the Fee Schedule, 

the Exchange currently offers various 

Add/Remove Volume Tiers. In 

particular, the Exchange offers six Add 

Volume Tiers that each provide an 

enhanced rebate for Members’ 

qualifying orders yielding fee codes B,7

V,8 Y,9 3,10 and 4,11 where a Member 

reaches certain add volume-based 

criteria.12 First, the Exchange is 

proposing to introduce a new Add 

Volume Tier 7 to provide Members an 

additional manner in which they could 

receive an enhanced rebate if certain 

criteria is met. The proposed criteria for 

proposed Add Volume Tier 7 is as 

follows: 

• Add Volume Tier 7 provides a 

rebate of $0.0034 per share for securities 

priced at or above $1.00 to qualifying 

orders (i.e., orders yielding fee B, V, Y, 

3, or 4) where: (1) Member has a total 

remove ADV 13 ≥0.40% of the TCV 14 or 

Member has a total remove ADV 

≥40,000,000; and (2) Member has a 

Hidden, Primary Peg ADV 15 ≥1,000,000; 

and (3) Member has a Hidden Midpoint 

ADV (i.e., yielding fee codes DM 16 or 

MM 17) ≥5,000,000. 

Second, the Exchange proposes to 

modify the criteria of the existing 

Market Quality Tier. Currently, the 

criteria for the Market Quality Tier is as 

follows: 

• The Market Quality Tier provides a 

rebate of $0.0028 per share for securities 

priced at or above $1.00 to qualifying 

orders (i.e., orders yielding fee B, V, Y, 

3, or 4) where: (1) Member adds an ADV 

≥0.25% of the TCV; and (2) Member 

adds an ADV ≥0.10% of the TCV as 


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87014 Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Notices 

18Fee code HA is appended to non-displayed 

orders adding liquidity to EDGX. 

19Fee code HI is appended to non-displayed 

orders adding liquidity to EDGX that receive price 

improvement. 

20Fee code RP is appended to non-displayed 

orders adding liquidity to EDGX using 

Supplemental Peg. 

21Fee code BB is appended to orders that remove 

liquidity from EDGX in Tape B securities. 

22Fee code N is appended to orders that remove 

liquidity from EDGX in Tape C securities. 

23Fee code W is appended to orders that remove 

liquidity from EDGX in Tape A securities. 

24See EDGX Rule 11.21(a)(1). A ‘‘Retail Member 

Organization’’ or ‘‘RMO’’ is a Member (or a division 

thereof) that has been approved by the Exchange 

under this Rule to submit Retail Orders. 

25See EDGX Rule 11.21(a)(2). A ‘‘Retail Order’’ is 

an agency or riskless principal order that meets the 

criteria of FINRA Rule 5320.03 that originates from 

a natural person and is submitted to the Exchange 

by a Retail Member Organization, provided that no 

change is made to the terms of the order with 

respect to price or side of market and the order does 

not originate from a trading algorithm or any other 

computerized methodology. 

26 15 U.S.C. 78f(b). 

27 15 U.S.C. 78f(b)(5). 

Non-Displayed orders that yield fee 

codes DM, HA,18 HI,19 MM or RP.20

Now, the Exchange proposes to 

amend the second prong of criteria in 

the Market Quality Tier. The proposed 

criteria is as follows: 

• The Market Quality Tier provides a 

rebate of $0.0028 per share for securities 

priced at or above $1.00 to qualifying 

orders (i.e., orders yielding fee B, V, Y, 

3, or 4) where: (1) Member adds an ADV 

≥0.25% of the TCV; and (2) Members 

adds an ADV ≥0.12% of the TCV as 

Non-Displayed orders that yield fee 

codes DM, HA, HI, MM or RP. 

Non-Displayed Add Volume Tiers 

In addition to the Add/Remove 

Volume Tiers offered under footnote 1, 

the Exchange also offers three NonDisplayed Add Volume Tiers that each 

provide an enhanced rebate for 

Members’ qualifying orders yielding fee 

codes DM, HA, MM, and RP, where a 

Member reaches certain volume-based 

criteria offered in each tier. The 

Exchange now proposes to introduce 

Non-Displayed Add Volume Tier 4. The 

proposed criteria for Non-Displayed 

Add Volume Tier 4 is as follows: 

• Non-Displayed Add Volume Tier 4 

provides a rebate of $0.0025 per share 

for securities priced at or above $1.00 to 

qualifying orders (i.e., orders yielding 

fee DM, HA, MM, or RP) where: (1) 

Member has a total remove ADV ≥0.40% 

of the TCV or Member has a total 

remove ADV ≥40,000,000; and (2) 

Member has a Hidden, Primary Peg 

ADV ≥1,000,000; and (3) Member has a 

Hidden Midpoint ADV (i.e., yielding fee 

codes DM or MM) ≥5,000,000. 

The Exchange also proposes to make 

minor grammatical changes to the 

introductory text associated with the 

Non-Displayed Add Volume Tiers. 

These changes are non-substantive in 

nature. 

Remove Volume Tiers 

In addition to the Add/Remove 

Volume Tiers and Non-Displayed Add 

Volume Tiers offered under footnote 1, 

the Exchange also offers three Remove 

Volume Tiers that each assess a reduced 

fee for Members’ qualifying orders 

yielding fee codes BB,21 N,22 and W23

where a Member reaches certain add 

volume-based criteria. The Exchange 

now proposes to amend Remove 

Volume Tier 3. Currently, the criteria for 

Remove Volume Tier 3 is as follows: 

• Remove Volume Tier 3 provides a 

reduced fee of $0.00275 per share for 

securities priced at or above $1.00 to 

qualifying orders (i.e., orders yielding 

fee codes BB, N, or W) and a reduced 

fee of 0.28% of total dollar value for 

securities priced below $1.00 where: (1) 

Member has an ADAV ≥0.30% of the 

TCV; and (2) Member has a total remove 

ADV ≥0.40% of the TCV; and (3) 

Member adds Retail Pre Market Order 

ADV (i.e., yielding fee code ZO) 

≥3,000,000. 

Now, the Exchange proposes to 

amend the second prong of criteria in 

Remove Volume Tier 3. The proposed 

criteria is as follows: 

• Proposed Remove Volume Tier 3 

provides a reduced fee of $0.00275 per 

share for securities priced at or above 

$1.00 to qualifying orders (i.e., orders 

yielding fee codes BB, N, or W) and a 

reduced fee of 0.28% of total dollar 

value for securities priced below $1.00 

where: (1) Member has an ADAV 

≥0.30% of the TCV; and (2) Member has 

a total remove ADV ≥0.40% of the TCV 

or Member has a total remove ADV 

≥40,000,000; and (3) Member adds 

Retail Pre Market Order ADV (i.e., 

yielding fee code ZO) ≥3,000,000. 

Retail Volume Tiers 

Pursuant to footnote 2 of the Fee 

Schedule, the Exchange offers Retail 

Volume Tiers which provide Retail 

Member Organizations (‘‘RMOs’’) 24 an 

opportunity to receive an enhanced 

rebate from the standard rebate for 

Retail Orders 25 that add liquidity (i.e., 

yielding fee code ZA or ZO). Currently, 

the Retail Volume Tiers offer two Retail 

Volume Tiers where a Member is 

eligible for an enhanced rebate for 

qualifying orders (i.e., yielding fee code 

ZA or ZO) meeting certain add volumebased criteria. The Exchange now 

proposes to introduce Retail Volume 

Tier 3. The proposed criteria for Retail 

Volume Tier 3 is as follows: 

• Proposed Retail Volume Tier 3 

provides an enhanced rebate of $0.0037 

per share for securities priced above 

$1.00 to qualifying orders (i.e., orders 

yielding fee ZA or ZO) where: (1) 

Member has a total remove ADV ≥0.40% 

of the TCV or Member has a total 

remove ADV ≥40,000,000; and (2) 

Member has a Hidden, Primary Peg 

ADV ≥1,000,000; and (3) Member has a 

Hidden Midpoint ADV (i.e., yielding fee 

codes DM or MM) ≥5,000,000. 

Together, the proposed addition of 

Retail Volume Tier 3, proposed addition 

of Add Volume Tier 7, proposed 

amendment to the Market Quality Tier, 

proposed addition of Non-Displayed 

Add Volume Tier 4, and proposed 

amendment to Remove Volume Tier 3 

are each intended to provide Members 

an alternative opportunity to earn an 

enhanced rebate or a reduced fee by 

increasing their order flow to the 

Exchange, which further contributes to 

a deeper, more liquid market and 

provides even more execution 

opportunities for active market 

participants. Incentivizing an increase 

in liquidity adding or removing volume, 

through enhanced rebate or reduced fee 

opportunities, encourages 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. 

The Exchange also proposes to make 

minor grammatical changes to the 

introductory text associated with the 

Retail Volume Tiers. These changes are 

non-substantive in nature. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.26 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 27 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 


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28 Id. 

29 15 U.S.C. 78f(b)(4). 

30See MIAX Pearl Equities Exchange Fee 

Schedule, Remove Volume Tier, available at https:// 

www.miaxglobal.com/sites/default/files/fee_

schedule-files/MIAX_Pearl_Equities_Fee_Schedule_

12012023.pdf See also MEMX Equities Fee 

Schedule, Liquidity Removal Tier, available at 

https://info.memxtrading.com/equities-tradingresources/us-equities-fee-schedule/. 

31See e.g., BZX Equities Fee Schedule, Footnote 

1, Add/Remove Volume Tiers. 

32See e.g., EDGX Equities Fee Schedule, Footnote 

1, Add/Remove Volume Tiers. 

33Supra note 15. 

34Supra notes 16–17. 

35See EDGX Equities Rule 11.6(j)(2). A ‘‘Primary 

Peg’’ order is an order with instructions to peg to 

the NBB, for a buy order, or the NBO, for a sell 

order. 

36See EDGX Equities Rule 11.8(d). A MidPoint 

Peg Order is a non-displayed Market Order or Limit 

Order with an instruction to execute at the 

midpoint of the NBBO, or, alternatively, pegged to 

the less aggressive of the midpoint of the NBBO or 

one minimum price variation inside the same side 

of the NBBO as the order. 

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) 28 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers as 

well as Section 6(b)(4) 29 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. 

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 

Exchange believes that its proposal to: 

(1) introduce new Add Volume Tier 7; 

(2) modify the Market Quality Tier; (3) 

introduce new Non-Displayed Add 

Volume Tier 4; (4) modify Remove 

Volume Tier 3; and (5) introduce new 

Retail Volume Tier 3 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. Specifically, the 

Exchange’s proposal to introduce 

slightly more difficult criteria to its 

Market Quality Tier and Remove 

Volume Tier is not a significant 

departure from existing criteria, is 

reasonably correlated to the enhanced 

rebate or reduced fee offered by the 

Exchange and other competing 

exchanges,30 and will continue to 

incentivize Members to submit order 

flow to the Exchange. Additionally, the 

Exchange notes that relative volumebased incentives and discounts have 

been widely adopted by exchanges,31

including the Exchange,32 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. Competing equity exchanges 

offer similar tiered pricing structures, 

including schedules of rebates and fees 

that apply based upon members 

achieving certain volume and/or growth 

thresholds, as well as assess similar fees 

or rebates for similar types of orders, to 

that of the Exchange. Further, the 

Exchange believes that its proposal to 

incentivize Hidden, Primary Peg ADV 33

and Hidden Midpoint ADV 34 will 

encourage Members to submit 

additional non-displayed orders to the 

Exchange using pegged order types. The 

Exchange believes that non-displayed, 

Primary Peg 35 orders will reduce the 

number of cancel/replace messages 

submitted by Members to the Exchange 

and non-displayed MidPoint Peg 36

orders will encourage greater liquidity 

with the potential for price 

improvement on the Exchange. 

In particular, the Exchange believes 

its proposal to: (1) introduce new Add 

Volume Tier 7; (2) modify the Market 

Quality Tier; (3) introduce new NonDisplayed Add Volume Tier 4; (4) 

modify Remove Volume Tier 3; and (5) 

introduce new Retail Volume Tier 3 is 

reasonable because the revised tiers will 

be available to all Members and provide 

all Members with an additional 

opportunity to receive an enhanced 

rebate or a reduced fee. The Exchange 

further believes the proposed 

modifications to its Add Volume Tier, 

Non-Displayed Add Volume Tier, and 

Retail Volume Tier will provide a 

reasonable means to encourage liquidity 

adding displayed orders and liquidity 

adding non-displayed orders, 

respectively, in Members’ order flow to 

the Exchange and to incentivize 

Members to continue to provide 

liquidity adding volume to the 

Exchange by offering them an additional 

opportunity to receive an enhanced 

rebate or reduced fee on qualifying 

orders. Further, the Exchange wishes to 

encourage the use of the Primary Peg 

and MidPoint Peg order types by 

introducing criteria specific to Hidden, 

Primary Peg ADV and Hidden Midpoint 

ADV. While the proposed criteria in the 

Market Quality Tier and Remove 

Volume Tier 3 are slightly more difficult 

than the current criteria found in those 

tiers, the proposed criteria is not a 

significant departure from existing 

criteria, is reasonably correlated to the 

enhanced rebate or reduced fee offered 

by the Exchange, and will continue to 

incentivize Members to submit order 

flow to the Exchange. An overall 

increase in activity would deepen the 

Exchange’s liquidity pool, offers 

additional cost savings, support the 

quality of price discovery, promote 

market transparency and improve 

market quality, for all investors. 

The Exchange believes that the 

proposed changes to its Add/Remove 

Volume Tiers, Market Quality Tier, 

Non-Displayed Add Volume Tier, and 

Retail Volume Tier are reasonable as 

they do not represent a significant 

departure from the criteria currently 

offered in the Fee Schedule. The 

Exchange also believes that the proposal 

represents an equitable allocation of fees 

and rebates and is not unfairly 

discriminatory because all Members 

will be eligible for the proposed new 

tiers and have the opportunity to meet 

the tiers’ criteria and receive the 

corresponding enhanced rebate if such 

criteria is met. 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 the new 

proposed tiers. While the Exchange has 

no way of predicting with certainty how 

the proposed changes will impact 

Member activity, based on the prior 

months volume, the Exchange 

anticipates that at least one Member will 

be able to satisfy proposed Add Volume 

Tier 7, at least two Members will be able 

to satisfy the proposed Market Quality 

Tier, at least one Member will be able 

to satisfy proposed Non-Displayed Add 

Volume Tier 4, at least one Member will 

be able to satisfy proposed Remove 

Volume Tier 3, and at least 1 Member 

will be able to satisfy proposed Retail 

Volume Tier 3. The Exchange also notes 

that proposed changes will not 

adversely impact any Member’s ability 

to qualify for enhanced rebates offered 

under other tiers. Should a Member not 

meet the proposed new criteria, the 


ddrumheller on DSK120RN23PROD with NOTICES1
87016 Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Notices 

37Supra note 3. 

38See Securities Exchange Act Release No. 51808 

(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005). 

39NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

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

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

40 15 U.S.C. 78s(b)(3)(A). 

41 17 CFR 240.19b–4(f). 

Member will merely not receive that 

corresponding enhanced rebate. 

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. Rather, as 

discussed above, the Exchange believes 

that the proposed changes 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 changes further 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 changes do not impose any burden 

on intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Particularly, 

the proposed changes to the Exchange’s 

Add/Remove Volume Tiers, Market 

Quality Tier, Non-Displayed Add 

Volume Tier, and Retail Volume Tier 

will apply to all Members equally in 

that all Members are eligible for each of 

the Tiers, have a reasonable opportunity 

to meet the Tiers’ criteria and will 

receive the enhanced rebate on their 

qualifying orders if such criteria is met. 

The Exchange does not believe the 

proposed changes burden competition, 

but rather, enhances competition as it is 

intended to increase the 

competitiveness of EDGX by amending 

an existing pricing incentive and 

adopting pricing incentives in order to 

attract order flow and incentivize 

participants to increase their 

participation on the Exchange, 

providing for additional execution 

opportunities for market participants 

and improved price transparency. 

Greater overall order flow, trading 

opportunities, and pricing transparency 

benefits all market participants on the 

Exchange by enhancing market quality 

and continuing to encourage Members 

to send orders, thereby contributing 

towards a robust and well-balanced 

market ecosystem. 

Next, the Exchange believes the 

proposed rule changes 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 other 

equities exchanges, off-exchange 

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 14% of the market share.37

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.’’ 38 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’ . . . .’’.39 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 40 and paragraph (f) of Rule 

19b–4 41 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– 

CboeEDGX–2023–078 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–2023–078. 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 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 88, No. 240 / Friday, December 15, 2023 / Notices 87017 

42 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 

pricing changes on September 29, 2023 with an 

effective date of October 1, 2023 (SR–GEMX–2023– 

12). On November 15, 2023, the Exchange withdrew 

SR–GEMX–2023–12 and replaced with SR–GEMX– 

2023–15. The instant filing replaces SR–GEMX– 

2023–15, which was withdrawn on November 29, 

2023. 

4The Exchange offers customers the opportunity 

to co-locate their servers and equipment within the 

Exchange’s primary data center, located in Carteret, 

New Jersey. 

5See Securities Exchange Act Release No. 81902 

(October 19, 2017), 82 FR 49453 (October 25, 2017) 

(SR–GEMX–2017–48). 

6NYSE provides a similar service for a $3,000 

initial charge plus a $400 monthly charge. See 

https://www.nyse.com/publicdocs/Wireless_

Connectivity_Fees_and_Charges.pdf. 

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 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–CboeEDGX–2023–078 and should be 

submitted on or before January 5, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.42

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27528 Filed 12–14–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99129; File No. SR–GEMX– 

2023–17] 

Self-Regulatory Organizations; Nasdaq 

GEMX, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend Its GPS 

Antenna Fees at General 8, Section 1 

December 11, 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 November 

29, 2023, Nasdaq GEMX, LLC (‘‘GEMX’’ 

or ‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘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 

The Exchange proposes to amend the 

Exchange’s GPS antenna fees at General 

8, Section 1, as described further below. 

The text of the proposed rule change is 

available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/gemx/rules, 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 aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 3

The Exchange offers a GPS antenna, 

which allows co-location customers 4 to 

synchronize their time recording 

systems to the U.S. Government’s Global 

Positioning System (‘‘GPS’’) network 

time (the ‘‘Service’’). The Exchange 

proposes to modify its monthly fees for 

the Service at General 8, Section 1(d). 

GPS network time is the atomic time 

scale implemented by the atomic clocks 

in the GPS ground control stations and 

GPS satellites. Each GPS satellite 

contains multiple atomic clocks that 

contribute precise time data to the GPS 

signals. GPS receivers decode these 

signals, synchronizing the receivers to 

the atomic clocks. A GPS antenna serves 

as a time signal receiver and feeds a 

primary clock device the GPS network 

time using precise time data. Firms can 

use the precise time data provided by 

the GPS antenna to time-stamp 

transactional information. 

Time synchronization services are 

well established in the U.S. and utilized 

in many areas of the U.S. economy and 

infrastructure. The Service is not novel 

to the securities markets, or to the 

Exchange. 

The Exchange offers connectivity to a 

GPS antenna via two options, over 

shared infrastructure or a dedicated 

antenna. If a firm wishes to connect via 

a dedicated connection, it must supply 

the antenna hardware. 

The Exchange currently charges a 

monthly fee of $200 for the Service, 

which applies to both the shared 

infrastructure option and the dedicated 

antenna option. The Exchange proposes 

to increase the monthly fee to $600 for 

the Service, which would apply to both 

the shared infrastructure option and the 

dedicated antenna option. As such, the 

Exchange proposes to amend its fee 

schedule at General 8, Section 1(d) to 

reflect the increased monthly fee for the 

GPS antenna. The Exchange has not 

raised such price since the monthly fee 

of $200 was adopted.5 In addition, the 

Exchange charges a higher monthly fee 

of $350 for cross-connections to 

approved telecommunication carriers in 

the data center and for inter-cabinet 

connections to other co-location 

customers in the data center, despite the 

fact that the Service not only provides 

connectivity (like the crossconnections), but also provides data 

(i.e., the network time) to co-location 

customers. 

In addition, the Exchange’s fee 

schedule at General 8, Section 1(d) 

currently states that the installation fee 

for the GPS antenna is installation 

specific. The Exchange proposes to add 

specific installation amounts for the 

Service within the fee schedule, 

providing greater transparency to 

market participants. Specifically, the 

Exchange proposes to charge an 

installation fee of $900 for connectivity 

to a GPS antenna over shared 

infrastructure and $1,500 for 

connectivity to a GPS antenna over a 

dedicated antenna.6 The difference in 

installation costs reflects the differing 

levels of complexity. For the dedicated 

antenna option, installation involves 

installing an antenna on the roof 

whereas the shared option involves 


ddrumheller on DSK120RN23PROD with NOTICES1