86400 Federal Register / Vol. 88, No. 238 / Wednesday, December 13, 2023 / Notices 

10 17 CFR 240.17Ad–22(e)(1). 

11 17 CFR 240.17Ad–22(e)(1). 

12 15 U.S.C. 78q–1(b)(3)(F). 

13 17 CFR 240.17Ad–22(e)(1). 

14 15 U.S.C. 78s(b)(2). 

15 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). 

16 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Cboe Global Markets U.S. Options Market 

Volume Summary by Month (November 29, 2023), 

available at https://markets.cboe.com/us/options/ 

market_statistics/. 

its activities in all relevant 

jurisdictions.10

The proposed rule change would help 

provide a well-founded, clear, 

transparent, and enforceable legal basis 

for ICC’s clearance of SES contracts on 

the Kingdom of Morocco and the 

Federal Republic of Nigeria. By 

amending Rule 26D–102 to add both the 

Kingdom of Morocco and the Federal 

Republic of Nigeria to the list of specific 

Eligible SES Reference Entities to be 

cleared by ICC, the proposed rule 

change would help to ensure that ICC 

can clear SES contracts on those 

countries pursuant to its existing rules 

in Subchapter 26D. The revised 

Subchapter 26D would provide a wellfounded, clear, transparent, and 

enforceable legal basis for ICC to clear 

these contracts, consistent with the 

requirements of Rule 17Ad–22(e)(1).11

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 12 and 

Rule 17Ad–22(e)(1) thereunder.13

It is therefore ordered pursuant to 

section 19(b)(2) of the Act 14 that the 

proposed rule change (SR–ICC–2023– 

014), be, and hereby is, approved.15

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27275 Filed 12–12–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99116; File No. SR–C2– 

2023–024] 

Self-Regulatory Organizations; Cboe 

C2 Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change Relating To Amend Its 

Fees Schedule 

December 7, 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 

1, 2023, Cboe C2 Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘C2’’) 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 C2 Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘C2’’) proposes to amend 

its Fee Schedule. The text of the 

proposed rule change is 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/ctwo/), 

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, effective December 1, 

2023. 

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 

17 options venues to which market 

participants may direct their order flow. 

Based on publicly available information, 

no single options exchange has more 

than approximately 16% of the market 

share and currently the Exchange 

represents approximately 3% of the 

market share.3 Thus, in such a lowconcentrated and highly competitive 

market, no single options exchange, 

including the Exchange, possesses 

significant pricing power in the 

execution of option order flow. The 

Exchange believes that the ever-shifting 

market share among the exchanges from 

month to month demonstrates that 

market participants can shift order flow 

or discontinue to reduce use of certain 

categories of products, in response to fee 

changes. Accordingly, competitive 

forces constrain the Exchange’s 

transaction fees, and market participants 

can readily trade on competing venues 

if they deem pricing levels at those 

other venues to be more favorable. 

Fee Code Updates 

First, the Exchange proposes to 

amend the transaction fee for Public 

Customer orders in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF that 

remove liquidity. Currently, public 

customer orders in equity, multiplylisted index, ETF and ETN penny 

options classes (except SPY, AAPL, 

QQQ, IWM and SLV) that remove 

liquidity are assessed a standard 

transaction fee of $0.43 per contract and 

yield fee code ‘‘PC’’. The Exchange 

proposes to remove orders in AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF from fee code PC and, instead, 

assess fee code ‘‘SC’’ for Public 

Customer orders in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF that 

remove liquidity. Fee code SC is 

currently appended to Public Customer 

orders in SPY, AAPL, QQQ, IWM and 


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4 ‘‘ADAV’’ means average daily added volume 

calculated as the number of contracts added, per 

day. 

5 ‘‘Step-Up ADAV’’ means ADAV in the relevant 

baseline month subtracted from current ADAV. 

6 ‘‘OCV’’ means, the total equity and ETF options 

volume that clears in the Customer range at the 

Options Clearing Corporation (‘‘OCC’’) for the 

month for which the fees apply, excluding volume 

on any day that the Exchange experiences an 

Exchange System Disruption and on any day with 

a scheduled early market close. 

SLV that remove liquidity and assesses 

a reduced fee (from that of fee code PC) 

of $0.37 per contract. 

The Exchange next proposes to amend 

the rebate for C2 Market Maker orders 

in AMC, AMD, AMZN, HYG, PLTR, 

TSLA, and XLF that add liquidity, 

including if they are a National Best Bid 

or Offer (‘‘NBBO’’) Joiner or NBBO 

Setter. Currently, such C2 Market 

Makers orders are provided a rebate of 

$0.41 per contract and yield fee code 

‘‘PM’’. Fee code SL is currently 

appended to C2 Market Maker orders in 

SPY, AAPL, QQQ, IWM and SLV that 

add liquidity and are a National Best 

Bid or Offer (‘‘NBBO’’) Joiner or NBBO 

Setter and offers a rebate of $0.31 per 

contract for such orders. Particularly, to 

qualify as a NBBO Joiner, a C2 marketmaker order must improve the C2 Best 

Bid or Offer (‘‘BBO’’) and result in C2 

joining an existing NBBO. Only the first 

order received that results in C2 BBO 

joining the NBBO at a new price level 

will qualify for the enhanced rebate. If 

C2 is at the NBBO, the order will not 

qualify. Alternatively, C2 Market 

Makers may receive the enhanced rebate 

if they are a NBBO Setter. To qualify as 

a NBBO Setter and receive the enhanced 

rebate, a C2 Market Maker order must 

set the NBBO. The Exchange now 

proposes to add C2 Market Maker orders 

in AMC, AMD, AMZN, HYG, PLTR, 

TSLA, and XLF that add liquidity and 

are a National Best Bid or Offer 

(‘‘NBBO’’) Joiner or NBBO Setter to fee 

code SL. The Exchange also proposes to 

amend the rebate for orders yielding fee 

code SL, from $0.31 to $0.32. The 

Exchange believes assessing fee code SL 

and the corresponding enhanced rebate 

for C2 Market Makers in AMC, AMD, 

AMZN, HYG, PLTR, TSLA, and XLF 

that are NBBO Joiners or Setters will 

continue to incentivize liquidity 

providers to provide more aggressively 

priced liquidity in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF options. 

Further, the Exchange believes that the 

increased rebate for orders yielding fee 

code SL will also incentivize liquidity 

providers to provide more aggressively 

priced liquidity in SPY, AAPL, QQQ, 

IWM and SLV options. 

The Exchange next proposes to amend 

the rebate for C2 Market Maker orders 

in AMC, AMD, AMZN, HYG, PLTR, 

TSLA, and XLF that add liquidity. As 

noted above, currently, C2 Market 

Makers orders in equity, multiply-listed 

index, ETF and ETN penny options 

classes (except SPY, AAPL, QQQ, IWM 

and SLV) that add liquidity are 

provided a rebate of $0.41 per contract 

and yield fee code ‘‘PM’’. The Exchange 

proposes to remove orders in AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF from fee code PM and, instead, 

assess existing fee code ‘‘SM’’ for C2 

Market Maker orders in AMC, AMD, 

AMZN, HYG, PLTR, TSLA, and XLF. 

Fee code SM is currently appended to 

C2 Market Maker orders in SPY, AAPL, 

QQQ, IWM and SLV that add liquidity 

and offer a reduced rebate (from that of 

fee code PM) of $0.20 per contract. 

The Exchange also proposes to amend 

the rebate for non-Market Maker, nonCustomer orders in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF that add 

liquidity. Currently, non-Market Maker, 

non-Customer orders (i.e., Professional 

Customer, Firm, Broker/Dealer, non-C2 

Market Maker, JBO, etc.) in equity, 

multiply-listed index, ETF and ETN 

penny options classes (except SPY, 

AAPL, QQQ, IWM and SLV) that add 

liquidity are provided a rebate of $0.36 

per contract and yield fee code ‘‘PN’’. 

The Exchange proposes to remove 

orders in AMC, AMD, AMZN, HYG, 

PLTR, TSLA, and XLF from fee code PN 

and, instead, assess existing fee code 

‘‘SN’’ on non-Market Maker, nonCustomer orders in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF that add 

liquidity. Fee code SN is currently 

appended to such orders in SPY, AAPL, 

QQQ, IWM and SLV and assesses a 

reduced rebate (from that of fee code 

PN) of $0.20 per contract. 

The Exchange also proposes to add 

AMC, AMD, AMZN, HYG, PLTR, TSLA, 

and XLF to the table in the Fee 

Schedule that currently sets forth SPY, 

AAPL, QQQ, IWM and SLV-specific 

pricing. Like with SPY, AAPL, QQQ, 

IWM and SLV, the Exchange also 

proposes to clarify that the first 

transaction fee table, which does not 

apply to RUT, DJX, SPY, AAPL, QQQ, 

IWM and SLV, also does not apply to 

AMC, AMD, AMZN, HYG, PLTR, TSLA, 

and XLF. The Exchange notes that 

transaction fees and rebates that apply 

to (1) Public Customer orders in AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF that add liquidity (existing fee code 

‘‘PY’’) (2) C2 Market Maker orders in 

AMC, AMD, AMZN, HYG, PLTR, TSLA, 

and XLF that remove liquidity (existing 

fee code ‘‘PR’’), (3) non-Market Maker, 

non-Customer orders in AMC, AMD, 

AMZN, HYG, PLTR, TSLA, and XLF 

that remove liquidity (existing fee code 

‘‘PP), (4) orders in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF that trade 

at the open (existing fee code ‘‘OO’’) and 

(5) resting orders in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF that trade 

with resting complex orders (existing 

fee code ‘‘CA’’) are not changing, nor are 

the associated fee codes. 

Market Maker Volume Tiers 

The Exchange also proposes to amend 

Footnote 1 (Market Maker Volume 

Tiers), applicable to qualifying C2 

Market Maker orders yielding fee code 

SM. Pursuant to Footnote 1 of the Fee 

Schedule, the Exchange currently offers 

two Market Maker Volume Tiers, which 

provide enhanced rebates between $0.26 

and $0.30 per contract for qualifying 

Market Maker orders yielding fee code 

SM where a TPHTPH [sic] meets 

required criteria. Specifically, Tier 1 

provides an enhanced rebate of $0.26 

per contract where a TPH: (1) has an 

ADAV 4 in Market-Maker orders in SPY, 

AAPL, QQQ, IWM and SLV (i.e., 

yielding fee codes SM or SL) greater 

than or equal to 50,000 contracts; or (2) 

has a Step-Up ADAV 5 in Market-Maker 

orders in SPY, AAPL, QQQ, IWM and 

SLV (i.e., yielding fee codes SM or SL) 

greater than or equal to 15,000 contracts 

from March 2021. Tier 2 provides a 

higher rebate of $0.30 per contract 

where a TPH meets the more stringent 

criteria of having an ADAV in MarketMaker orders in SPY, AAPL, QQQ, IWM 

and SLV (i.e., yielding fee codes SM or 

SL) greater than or equal to 130,000 

contracts. 

The Exchange proposes to amend the 

required criteria for Tiers 1 and 2. 

Specifically, the Exchange proposes to 

amend Tier 1 criteria to state that a 

TPHTPH [sic] must have (1) an ADAV 

in Market-Maker orders in SPY, AAPL, 

QQQ, IWM, SLV, AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF (i.e., 

yielding fee codes SM or SL) greater 

than or equal to 0.15% of Average 

OCV.6 The Exchange proposes to amend 

Tier 2 criteria to state that a TPHTPH 

[sic] must have an ADAV in MarketMaker orders in SPY, AAPL, QQQ, 

IWM, SLV, AMC, AMD, AMZN, HYG, 

PLTR, TSLA, and XLF (i.e., yielding fee 

codes SM or SL) greater than or equal 

to 0.35% of Average OCV. Additionally, 

the Exchange proposes to change the 

enhanced rebate for Tier 2 from $0.30 

per contract to $0.28 per contract. 

The Exchange also proposes to add 

new Market Maker Volume Tier 3 to 

provide a rebate of $0.31 per contract if 

a TPH has an ADAV in Market-Maker 

orders in SPY, AAPL, QQQ, IWM, SLV, 


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7See, e.g., MIAX Pearl Fee Schedule, Section 1 

Transaction Rebates/Fees, which provides for 

product-specific pricing for SPY, QQQ, and IWM; 

and Nasdaq ISE Pricing Schedule, Section 3, 

Footnote 5, which provides for tiered rebates for 

market maker IWM and QCC orders that add 

liquidity between $0.10 and $0.26 per contract, as 

well as tired rebates for market maker orders in 

similar, single-name options (AMZN, FB, and 

NVDA) between $0.15 and $0.22. 

8 15 U.S.C. 78f(b). 

9 15 U.S.C. 78f(b)(5). 

10 Id. 11 15 U.S.C. 78f(b)(4). 

12See Cboe C2 Options Exchange Fee Schedule, 

Transaction Fees. 13See supra note 8. 14See Cboe C2 Options Exchange Fee Schedule, 

Transaction Fees; see also BZX Options Fee 

Schedule, Fee Codes and Associated Fees. 

AMC, AMD, AMZN, HYG, PLTR, TSLA, 

and XLF (i.e., yielding fee codes SM or 

SL) greater than or equal to 0.60% of 

Average OCV. Finally, the Exchange 

propose to add new Market Maker 

Volume Tier 4 to provide an enhanced 

rebate of $0.32 per contract if a TPH has 

an ADAV in Market-Maker orders in 

SPY, AAPL, QQQ, IWM, SLV, AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF (i.e., yielding fee codes SM or SL) 

greater than or equal to 0.70% of 

Average OCV. 

The Exchange notes that other 

exchanges offer tiered product-specific 

pricing incentives.7 The proposed 

changes are designed to encourage 

Market-Makers to increase or grow their 

order flow on the Exchange in AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF, which facilitates tighter spreads, 

signaling increased activity from other 

market participants, and thus ultimately 

contributes to deeper and more liquid 

markets and provides greater execution 

opportunities on the Exchange to the 

benefit of all market participants. 

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.8 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 9 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) 10 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) of the Act,11 which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

TPHs 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. In 

particular, the proposed changes to 

Exchange execution fees and rebates for 

certain orders in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF are 

intended to attract order flow to the 

Exchange by continuing to offer 

competitive pricing while also creating 

additional incentives to providing 

aggressively priced displayed liquidity, 

which the Exchange believes would 

enhance market quality to the benefit of 

all market participants. 

The Exchange believes its proposed 

changes are reasonable as they are 

competitive and in line with the 

Exchange’s current pricing for the same 

orders in SPY, AAPL, QQQ, IWM, and 

SLV. The Exchange believes that it is 

reasonable to reduce the transaction fee 

for Public Customer orders in AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF that remove liquidity because 

market participants will be subject to 

lower fees for such orders and thus may 

be encouraged to increase retail AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF order flow to the Exchange. The 

Exchange believes that it is reasonable 

to reduce the rebates for both C2 Market 

Maker and non-Market Maker, nonCustomer orders in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF that add 

liquidity because such market 

participants will still receive rebates for 

such orders, albeit at a lower amount, 

which are already in place for such 

orders in SPY, AAPL, QQQ, IWM and 

SLV. Additionally, Market Makers that 

are NBBO Joiners or Setters in AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF would be eligible to receive the 

same rebate, as amended, that is 

currently offered for joining or setting 

an NBBO in SPY, AAPL, QQQ, IWM 

and SLV. The Exchange believes that 

offering the NBBO Joiner and Setter 

rebate for Market Maker orders in AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF is reasonable as it is designed to 

continue to incentivize C2 Market 

Makers to improve the C2 BBO resulting 

in C2 joining an existing NBBO or 

setting a new NBBO to receive the 

rebate, ultimately encouraging C2 

Market Makers to submit more 

aggressive AMC, AMD, AMZN, HYG, 

PLTR, TSLA, and XLF orders that will 

maintain tight spreads, benefitting both 

TPHs and public investors. Further, the 

Exchange believes it is reasonable to 

increase the current rebate for the NBBO 

Joiner and Setter rebate for Market 

Maker orders in SPY, AAPL, QQQ, IWM 

and SLV, as such market participants 

will still receive a rebate for such 

orders. 

The Exchange also believes it is 

reasonable, equitable and not unfairly 

discriminatory to adopt pricing specific 

to certain orders in AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF as the 

Exchange already maintains the same 

pricing for such orders in SPY, AAPL, 

QQQ, IWM and SLV, as well as similar 

product-specific pricing for certain 

orders in other products, such as RUT 

and DJX.12 Additionally, as noted above, 

other exchanges similarly provide for 

product-specific pricing.13

The Exchange also believes that it is 

equitable and not unfairly 

discriminatory to assess a lower fee for 

Public Customer orders in AMC, AMD, 

AMZN, HYG, PLTR, TSLA, and XLF as 

compared to other market participants 

because customer order flow enhances 

liquidity on the Exchange for the benefit 

of all market participants. Specifically, 

customer liquidity benefits all market 

participants by providing more trading 

opportunities, which attracts Market 

Makers. An increase in the activity of 

these market participants in turn 

facilitates tighter spreads, which may 

cause an additional corresponding 

increase in order flow from other market 

participants. Moreover, the options 

industry has a long history of providing 

preferential pricing to customers, and 

the Exchange’s current Fee Schedule 

currently does so in many places, as do 

the fees structures of multiple other 

exchanges.14 The Exchange notes that 

the proposed fee change will be applied 

equally to all Public Customers. 

The Exchange believes it is equitable 

and not unfairly discriminatory to 

provide C2 Market-Makers that are 

NBBO Joiners or Setters in AMC, AMD, 

AMZN, HYG, PLTR, TSLA, and XLF an 

enhanced rebate (compared to the 

proposed rebate for other C2 MarketMakers) because such market 

participants are providing more 


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15See supra note 8. 

16 Id. 

aggressively priced liquidity in AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF options. Additionally, increased 

add volume order flow, particularly by 

liquidity providers, contributes to a 

deeper, more liquid market, which, in 

turn, provides for increased execution 

opportunities and thus overall enhanced 

price discovery and price improvement 

opportunities on the Exchange. As such, 

this benefits all market participants by 

contributing towards a robust and wellbalanced market ecosystem, offering 

additional flexibility for all investors to 

enjoy cost savings, supporting the 

quality of price discovery, promoting 

market transparency and improving 

investor protection. The Exchange 

believes the proposed changes to the 

rebates for non-Market Maker, nonCustomer and C2 Market Maker AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF orders are also equitable and not 

unfairly discriminatory because they 

will be applied equally to all nonmarket-makers, non-customers and 

Market-Makers, respectively. 

The Exchange believes amending 

Market Maker Volume Tiers for C2 

Market Maker orders yielding fee code 

SM or SL is reasonable because they 

provide additional opportunities for 

TPHs to receive enhanced rebates on 

qualifying orders in a manner that 

incentivizes increased Market Maker 

order flow in certain multiply-listed 

options on the Exchange. The Exchange 

believes the Market Maker Volume 

Tiers, as amended, are reasonable means 

to encourage Market Makers to increase 

their order flow to specific multiplylisted options on the Exchange (i.e., 

SPY, AAPL, QQQ, IWM, SLV, AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF). The Exchange notes that 

increased Market Maker activity, 

particularly, facilitates tighter spreads 

and an increase in overall liquidity 

provider activity, both of which signal 

additional corresponding increase in 

order flow from other market 

participants, contributing towards a 

robust, well-balanced market ecosystem, 

particularly in multiply-listed options 

on the Exchange. The Exchange also 

believes that the amended enhanced 

rebate offered under Tier 2 and the 

proposed enhanced rebates offered 

under proposed Tiers 3 and 4 are 

reasonably based on the difficulty of 

satisfying the proposed tiers’ criteria 

and ensures the proposed rebate and 

thresholds appropriately reflect the 

incremental difficulty in achieving the 

Market-Maker Volume Tier. The 

Exchange believes that the proposed 

enhanced rebates are also in line with 

the enhanced rebates currently offered 

by another exchange for similar 

products.15 The Exchange also believes 

it is reasonable, equitable and not 

unfairly discriminatory to adopt pricing 

specific to certain orders in SPY, AAPL, 

QQQ, IWM, SLV, AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF as the 

Exchange already offers product-specific 

pricing for these orders and, and as 

noted above, other exchanges similarly 

provide for product-specific tiered 

pricing.16

The Exchange believes that the 

Market Maker Volume Tiers, as 

amended, represent an equitable 

allocation of fees and is not unfairly 

discriminatory because it applies 

uniformly to all Market Makers, in that 

all Market Makers have the opportunity 

to compete for and achieve the proposed 

tiers. The enhanced rebates will apply 

automatically and uniformly to all 

Market Makers that achieve the 

proposed corresponding criteria. While 

the Exchange has no way of knowing 

whether this proposed rule change 

would definitively result in any 

particular Market Maker qualifying for 

the proposed tiers, the Exchange 

believes that approximately two Market 

Makers will reasonably be able to 

achieve the amended criteria in Tier 1; 

approximately five Market Makers will 

be able to achieve the amended criteria 

in Tier 2; approximately two Market 

Makers will be able to achieve the 

criteria in proposed Tier 3; and 

approximately one Market Maker will 

be able to achieve the criteria in 

proposed Tier 4. The Exchange notes, 

however, that the tiers are open to any 

Market Maker that satisfies the tiers’ 

criteria. 

The Exchange lastly notes that it does 

not believe the tiers, as amended, will 

adversely impact any TPH’s pricing. 

Rather, should a TPH not meet the 

proposed criteria, the TPH will merely 

not receive the enhanced rebates 

corresponding to the tiers, and will 

instead receive the standard 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 will 

encourage the submission of additional 

liquidity in AMC, AMD, AMZN, HYG, 

PLTR, TSLA, and XLF to a public 

exchange, thereby promoting market 

depth, price discovery and transparency 

and enhancing order execution 

opportunities for all TPHs. 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 

similarly situated TPHs equally. The 

proposed change to reduce the 

transaction fee for Public Customer 

orders in AMC, AMD, AMXN, HYG, 

PLTR, TSLA, and XLF is designed to 

attract additional AMC, AMD, AMZN, 

HYG, PLTR, TSLA, and XLF Public 

Customer orders that remove liquidity. 

As noted above, the changes to the 

rebates for non-Market Maker, nonCustomer and C2 Market Maker AMC, 

AMD, AMZN, HYG, PLTR, TSLA, and 

XLF orders will be applied equally to all 

non-market-makers, non-customers and 

Market Makers, respectively. Further, 

the Exchange believes that the proposed 

change to increase the C2 Market Maker 

rebate for orders in SPY, AAPL, QQQ, 

and IWM and provide C2 MarketMakers that are NBBO Joiners or Setters 

in AMC, AMD, AMZN, HYG, PLTR, 

TSLA, and XLF an enhanced rebate 

(compared to the proposed rebate for 

other C2 Market-Makers) will 

incentivize entry on the Exchange of 

more aggressive SPY, AAPL, QQQ, 

IWM, SLV, AMC, AMD, AMZN, HYG, 

PLTR, TSLA, and XLF orders that will 

maintain tight spreads, benefitting both 

TPHs and public investors criteria and, 

as a result, provide for deeper levels of 

liquidity, increasing trading 

opportunities for other market 

participants, thus signaling further 

trading activity, ultimately incentivizing 

more overall order flow and improving 

price transparency on the Exchange. 

Finally, as noted above, the changes to 

the Market Maker Volume Tiers apply 

uniformly to all Market Makers, in that 

all Market Makers have the opportunity 

to compete for and achieve the proposed 

tiers; the enhanced rebates will apply 

automatically and uniformly to all 

Market Makers that achieve the 

proposed corresponding criteria. 

Next, 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. 

TPHs have numerous alternative venues 


khammond on DSKJM1Z7X2PROD with NOTICES
86404 Federal Register / Vol. 88, No. 238 / Wednesday, December 13, 2023 / Notices 

17See supra note 3. 

18 15 U.S.C. 78s(b)(3)(A). 

19 17 CFR 240.19b–4(f). 

20 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

that they may participate on and 

director their order flow, including 16 

other options exchanges and offexchange venues. Additionally, the 

Exchange represents a small percentage 

of the overall market. Based on publicly 

available information, no single options 

exchange has more than 16% of the 

market share.17 Therefore, no exchange 

possesses significant pricing power in 

the execution of option order flow. 

Indeed, participants can readily choose 

to send their orders to other exchange 

and off-exchange 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 18 and paragraph (f) of Rule 

19b–4 19 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– 

C2–2023–024 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–C2–2023–024. 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–C2–2023–024 and should be 

submitted on or before January 3, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2023–27268 Filed 12–12–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99104; File No. SR–ISE– 

2023–32] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Adopt Monthly 

Options Series and Amend the 

Nonstandard Expirations Program 

December 7, 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 ISE, LLC (‘‘ISE’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to adopt 

Monthly Options Series and (ii) amend 

its Nonstandard Expirations Program. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/ise/rules, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 


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