Federal Register / Vol. 89, No. 10 / Tuesday, January 16, 2024 / Notices 2681 

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

2 17 CFR 240.19b–4. 

3Located in the ‘‘MRUT LMM Incentive 

Program’’ table in the Fees Schedule. 

STATUS: This meeting will be closed to 

the public. 

MATTERS TO BE CONSIDERED: 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the closed meeting. Certain 

staff members who have an interest in 

the matters also may be present. In the 

event that the time, date, or location of 

this meeting changes, an announcement 

of the change, along with the new time, 

date, and/or place of the meeting will be 

posted on the Commission’s website at 

https://www.sec.gov. 

The General Counsel of the 

Commission, or her designee, has 

certified that, in her opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) 

and (10) and 17 CFR 200.402(a)(3), 

(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and 

(a)(10), permit consideration of the 

scheduled matters at the closed meeting. 

The subject matter of the closed 

meeting will consist of the following 

topics: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

Resolution of litigation claims; and 

Other matters relating to examinations 

and enforcement proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting agenda items that 

may consist of adjudicatory, 

examination, litigation, or regulatory 

matters. 

CONTACT PERSON MORE INFORMATION: For 

further information; please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

(Authority: 5 U.S.C. 552b) 

Dated: January 11, 2024. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–00756 Filed 1–11–24; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99301; File No. SR–CBOE– 

2024–001] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Its Fees 

Schedule 

January 9, 2024. 

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 January 2, 

2023, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) 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 Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

its Fees Schedule. The text of the 

proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegalRegulatory

Home.aspx), 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 

Fees Schedule in connection with 

certain Lead Market-Maker (‘‘LMM’’) 

Incentive Programs, effective January 2, 

2024. Specifically, the Exchange 

proposes to amend the following: the 

Mini Russell 2000 Index (‘‘MRUT’’) 

options LMM Incentive Program; the 

Nanos S&P 500 (‘‘NANOS’’) Index 

options LMM Incentive Program; the 

Global Trading Hours (‘‘GTH’’) Cboe 

Volatility Index (‘‘VIX’’) options and 

VIX Weekly (‘‘VIXW’’) options LMM 

Incentive Programs; and the GTH MiniSPX Index (‘‘XSP’’) LMM Incentive 

Programs. 

Each LMM Incentive Program 

provides a rebate to Trading Permit 

Holders (‘‘TPHs’’) with LMM 

appointments to the respective 

incentive program that meet certain 

quoting standards in the applicable 

series in a month. The Exchange notes 

that meeting or exceeding the quoting 

standards (both current and as 

proposed; described in further detail 

below) in each of the LMM Incentive 

Program products to receive the 

applicable rebate (both currently offered 

and as proposed; described in further 

detail below) is optional for an LMM 

appointed to a program. Particularly, an 

LMM appointed to an incentive program 

is eligible to receive the corresponding 

rebate if it satisfies the applicable 

quoting standards, which the Exchange 

believes encourages appointed LMMs to 

provide liquidity in the applicable class 

and trading session (i.e., Regular 

Trading Hours (‘‘RTH’’) or GTH). The 

Exchange may consider other 

exceptions to the programs’ quoting 

standards based on demonstrated legal 

or regulatory requirements or other 

mitigating circumstances. In calculating 

whether an LMM appointed to an 

incentive program meets the applicable 

program’s quoting standards each 

month, the Exchange excludes from the 

calculation in that month the business 

day in which the LMM missed meeting 

or exceeding the quoting standards in 

the highest number of the applicable 

series. 

MRUT LMM Incentive Program 

The Exchange first proposes to amend 

the current MRUT LMM Incentive 

Program. Currently, the program 

provides that if the appointed LMM in 

MRUT provides continuous electronic 

quotes during RTH that meet or exceed 

the program’s heightened quoting 

standards 3 in at least 97% of the series 

90% of the time in a given month, the 

LMM will receive a rebate for that 

month in the amount of $15,000 (or prorated amount if an appointment begins 

after the first trading day of the month 

or ends prior to the last trading day of 

the month). In addition to the rebate, if 

the appointed LMM meets or exceeds 

the above heightened quoting standards 

in a given month, the LMM will receive 

the Monthly average daily volume 

(‘‘ADV’’) Payment amount that 

corresponds to the level of ADV 

provided by the LMM in MRUT for that 


ddrumheller on DSK120RN23PROD with NOTICES1
2682 Federal Register / Vol. 89, No. 10 / Tuesday, January 16, 2024 / Notices 

4As part of the proposed changes, the Exchange 

proposes to remove a reference to heightened 

quoting standards specific to March 2022, as such 

reference is now outdated. 

5Located in the ‘‘NANOS LMM Incentive 

Program’’ table in the Fees Schedule. 

6Located in the ‘‘GTH1 VIX/VIXW LMM 

Incentive Program’’ table in the Fees Schedule. 

7 Id. 

8Located in the ‘‘GTH2 LMM Incentive Program’’ 

table in the Fees Schedule. 

month per the program’s Volume 

Incentive Pool. 

The Exchange now proposes to amend 

the time qualification requirement for 

the MRUT LMM Incentive Program. 

Specifically, the Exchange proposes to 

update the time qualification 

requirement to require the appointed 

LMM to provide continuous electronic 

quotes during RTH that meet or exceed 

the heightened quoting standards in at 

least 97% the MRUT series 88% of the 

time in a given month in order to 

receive the rebate, thereby decreasing 

the time qualification requirement by 

2%. 

The Exchange also proposes to update 

the rebate amount received for meeting 

the heightened quoting standards, as 

proposed, in a given month in MRUT, 

by decreasing the rebate amount from 

$15,000 to $5,000. 

Additionally, the Exchange proposes 

to remove the MRUT Volume Incentive 

Pool program from the Fees Schedule, 

as the Exchange no longer wishes to 

offer the additional volume-based 

incentive program. 

NANOS LMM Incentive Program 

Next, the Exchange proposes to 

amend the current NANOS LMM 

Incentive Program.4 Currently, the 

NANOS LMM Incentive Program 

provides that, for NANOS, if the 

appointed LMM provides continuous 

electronic quotes during RTH that meet 

or exceed the heightened quoting 

standards 5 in at least 98% of the 

NANOS series 90% of the time in a 

given month, the LMM will receive a 

rebate for that month in the amount of 

$17,500 (or pro-rated amount if an 

appointment begins after the first 

trading day of the month or ends prior 

to the last trading day of the month). 

The heightened quoting standards are 

based on the VIX Index value at the 

prior market close, with three separate 

value categories (i.e., VIX value at prior 

close less than 20, VIX value at prior 

close from 20 to 30, and VIX value at 

prior close greater than 30). In addition 

to the rebate, if the appointed LMM 

meets or exceeds the above heightened 

quoting standards in a given month, the 

LMM will receive the Monthly ADV 

Payment amount that corresponds to the 

level of ADV provided by the LMM in 

NANOS for that month per the 

program’s Volume Incentive Pool. 

The Exchange proposes to restructure 

the NANOS LMM Incentive Program 

and adopt a new set of heightened 

quoting standards. The VIX Index value 

categories and heightened quoting 

standards proposed for NANOS options 

are as follows in the table below: 

Premium level Width Size 

VIX Value at Prior Close <30 

$0.00–$2.00 ..................................................................................................................................................................... $0.10 500 

$2.01–$5.00 ..................................................................................................................................................................... 0.12 500 

$5.01–$15.00 ................................................................................................................................................................... 0.20 250 

Greater than $15.00 ........................................................................................................................................................ 0.31 100 

VIX Value at Prior Close from ≥30 

$0.00–$2.00 ..................................................................................................................................................................... 0.16 300 

$2.01–$5.00 ..................................................................................................................................................................... 0.17 300 

$5.01–$15.00 ................................................................................................................................................................... 0.31 150 

Greater than $15.00 ........................................................................................................................................................ 0.38 100 

The Exchange also proposes to amend 

the series qualification requirement for 

the NANOS LMM Incentive Program. 

Specifically, the Exchange proposes to 

update the series qualification 

requirement to require the appointed 

LMM to provide continuous electronic 

quotes during RTH that meet or exceed 

the heightened quoting standards in at 

least 97% the NANOS series 90% of the 

time in a given month in order to 

receive the rebate, thereby decreasing 

the series qualification requirement by 

1%. 

The Exchange proposes to update the 

rebate amount received for meeting the 

heightened quoting standards in a given 

month in NANOS options, by 

decreasing the rebate amount from 

$17,500 to $5,000. Additionally, the 

Exchange proposes to remove the 

NANOS Volume Incentive Pool program 

from the Fees Schedule, as the Exchange 

no longer wishes to offer the additional 

volume-based incentive program. 

VIX/VIXW LMM Incentive Programs 

The Exchange proposes to amend its 

GTH VIX/VIXW LMM Incentive 

Programs. Currently, the first GTH VIX/ 

VIXW LMM Incentive Program (‘‘GTH1 

VIX/VIXW LMM Incentive Program’’) 

provides that if an LMM in VIX/VIXW 

provides continuous electronic quotes 

during GTH from 7:15 p.m. CST to 2:00 

a.m. CST (‘‘GTH1’’) that meet or exceed 

the basic quoting standards 6 in at least 

99% of each of the VIX and VIXW 

series, 90% of the time in a given 

month, the LMM will receive a rebate 

for that month in the amount of $20,000 

for VIX and $15,000 for VIXW (or prorated amount if an appointment begins 

after the first trading day of the month 

or ends prior to the last trading day of 

the month) for that month. Additionally, 

if the appointed LMM provides 

continuous electronic quotes during 

GTH that meet or exceed the heightened 

quoting standards 7 in at least 99% of 

the VIX series, 90% of the time in a 

given month, the LMM will receive a 

rebate for that month of $0.02 per VIX/ 

VIXW contract executed in its MarketMaker capacity during RTH. 

The second GTH VIX/VIXW LMM 

Incentive Program (‘‘GTH2 VIX/VIXW 

LMM Incentive Program’’) provides that 

if the appointed LMM provides 

continuous electronic quotes during 

GTH from 2:00 a.m. CST to 8:15 a.m. 

CST (‘‘GTH2’’) that meet or exceed the 

basic quoting standards 8 in at least 99% 

of each of the VIX and VIXW series, 

90% of the time in a given month, the 

LMM will receive a rebate for that 

month in the amount of $20,000 for VIX 

and $15,000 for VIXW (or pro-rated 

amount if an appointment begins after 

the first trading day of the month or 

ends prior to the last trading day of the 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 10 / Tuesday, January 16, 2024 / Notices 2683 

9 Id. 10Located in the proposed ‘‘GTH VIX/VIXW 

LMM Incentive Program’’ table in the Fees 

Schedule. 

month) for that month. Additionally, if 

the appointed LMM provides 

continuous electronic quotes during 

GTH that meet or exceed the heighted 

quoting standards 9 in at least 99% of 

the VIX series, 90% of the time in a 

given month, the LMM will receive a 

rebate for that month of $0.02 per VIX/ 

VIXW contract executed in its MarketMaker capacity during RTH. 

The Exchange proposes to restructure 

the GTH1 and GTH2 VIX/VIXW LMM 

Incentive Programs by combining the 

two GTH programs into a singular GTH 

VIX/VIXW LMM Incentive Program, 

with one set of basic quoting standards 

for VIX options and one set of basic 

quoting standards for VIXW options. 

The proposed program provides that, if 

the appointed LMM provides 

continuous electronic quotes during 

GTH (i.e., from 7:15 p.m. CT to 8:15 a.m. 

CT the next day) that meet or exceed the 

basic quoting standards 10 in at least 

95% of each of the VIX and VIXW 

series, 90% of the time in a given 

month, the LMM will receive a rebate 

for that month in the amount of $25,000 

for VIX and $10,000 for VIXW (or prorated amount if an appointment begins 

after the first trading day of the month 

or ends prior to the last trading day of 

the month) for that month. 

The Exchange notes that the current 

basic quoting standards for the GTH1 

VIX/VIXW LMM Incentive Program 

(which are substantially similar to the 

basic quoting standards for the GTH2 

VIX/VIXW LMM Incentive Program, the 

only difference being that the current 

GTH1 basic quoting standards (i.e., the 

proposed GTH basic quoting standards) 

have slightly lower size requirements in 

certain instances than the current GTH2 

basic quoting standards) will be the 

basic quoting standards for the new 

combined GTH VIX/VIXW LMM 

Incentive Program. The new proposed 

rebate amounts represent a slight 

increase of $5,000 for VIX options and 

a slight decrease of $5,000 for VIXW 

options, as compared to the current 

rebates in place for the GTH1 and GTH2 

VIX/VIXW LMM Incentive Programs. 

There are no additional heightened 

quoting standards with additional 

rebate(s) under the proposed program. 

The proposed basic quoting standards 

for VIX options are as follows in the 

table below: 

Premium level 

Expiring less than 15 days Near term 15 days to 60 

days 

Mid term 61 days to 180 

days 

Long term 181 days or 

greater 

Width Size Width Size Width Size Width Size 

VIX Value at Prior Close <18 

$0.00–$1.00 ..................... $0.35 30 $0.25 40 $0.35 30 $0.80 5 

$1.01–$3.00 ..................... 0.50 15 0.35 25 0.50 15 0.90 5 

$3.01–$5.00 ..................... 0.60 15 0.35 15 0.60 10 1.00 5 

$5.01–$10.00 ................... 1.00 10 0.80 10 1.30 10 2.00 5 

$10.01–$30.00 ................. 2.00 5 1.50 5 2.00 5 3.00 3 

Greater than $30.00 ......... 5.00 3 3.00 3 5.00 3 5.00 3 

VIX Value at Prior Close from 18–25 

$0.00–$1.00 ..................... 0.50 15 0.35 30 0.50 15 1.00 5 

$1.01–$3.00 ..................... 0.50 10 0.50 20 0.70 10 1.00 5 

$3.01–$5.00 ..................... 0.80 5 0.50 15 0.80 5 1.30 5 

$5.01–$10.00 ................... 1.50 5 1.00 5 2.00 5 2.20 5 

$10.01–$30.00 ................. 3.00 1 2.50 1 3.00 1 5.00 1 

Greater than $30.00 ......... 5.00 1 5.00 1 5.00 1 10.00 1 

VIX Value at Prior Close from >25 

$0.00–$1.00 ..................... 0.80 10 0.50 10 0.60 10 1.20 5 

$1.01–$3.00 ..................... 1.00 10 0.75 10 1.00 10 1.20 5 

$3.01–$5.00 ..................... 1.20 5 0.90 10 1.20 5 1.80 5 

$5.01–$10.00 ................... 2.00 5 1.50 5 2.50 5 3.00 3 

$10.01–$30.00 ................. 5.00 1 5.00 1 5.00 1 7.00 1 

Greater than $30.00 ......... 10.00 1 10.00 1 10.00 1 10.00 1 

The proposed basic quoting standards 

for VIXW options are as follows in the 

table below: 

Premium level 

Less than 21 days to 

expiration 

21 days or greater to 

expiration 

Width Size Width Size 

$0.00–$1.00 ..................................................................................................................... $1.00 10 $1.50 10 

$1.01–$3.00 ..................................................................................................................... 1.50 10 2.50 10 

$3.01–$5.00 ..................................................................................................................... 2.50 3 4.00 3 

$5.01–$10.00 ................................................................................................................... 4.00 1 6.00 1 

$10.01–$30.00 ................................................................................................................. 6.00 1 10.00 1 


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I I I I 
2684 Federal Register / Vol. 89, No. 10 / Tuesday, January 16, 2024 / Notices 

11Located in the ‘‘GTH1 XSP LMM Incentive 

Program’’ table in the Fees Schedule. 

12Located in the ‘‘GTH2 XSP LMM Incentive 

Program’’ table in the Fees Schedule. 

Premium level 

Less than 21 days to 

expiration 

21 days or greater to 

expiration 

Width Size Width Size 

Greater than $30.00 ........................................................................................................ 10.00 1 10.00 1 

VIX Value at Prior Close from 18–25 

$0.00–$1.00 ..................................................................................................................... 1.50 5 2.00 5 

$1.01–$3.00 ..................................................................................................................... 2.50 5 4.00 5 

$3.01–$5.00 ..................................................................................................................... 4.00 1 5.00 1 

$5.01–$10.00 ................................................................................................................... 6.00 1 8.00 1 

$10.01–$30.00 ................................................................................................................. 10.00 1 10.00 1 

Greater than $30.00 ........................................................................................................ 10.00 1 10.00 1 

VIX Value at Prior Close from >25 

$0.00–$1.00 ..................................................................................................................... 10.00 1 10.00 1 

$1.01–$3.00 ..................................................................................................................... 10.00 1 10.00 1 

$3.01–$5.00 ..................................................................................................................... 10.00 1 10.00 1 

$5.01–$10.00 ................................................................................................................... 10.00 1 10.00 1 

$10.01–$30.00 ................................................................................................................. 10.00 1 10.00 1 

Greater than $30.00 ........................................................................................................ 10.00 1 10.00 1 

GTH1 and GTH2 XSP LMM Incentive 

Programs 

Lastly, the Exchange proposes to 

amend the XSP LMM Incentive 

Programs. The GTH1 XSP LMM 

Incentive Program provides that if the 

appointed LMM provides continuous 

electronic quotes during GTH1 that 

meet or exceed the heightened quoting 

standards 11 in at least 85% of the series 

90% of the time in a given month, the 

LMM will receive (i) a rebate for that 

month in the amount of $20,000 (or prorated amounts if an appointment begins 

after the first trading day of the month 

or ends prior to the last trading day of 

the month) and (ii) a rebate for that 

month of $0.03 per XSP contract 

executed in a Market-Maker capacity 

which provide liquidity in the Simple 

Book during RTH. The GTH2 XSP LMM 

Incentive Program provides that if an 

LMM appointed to the Program 

provides continuous electronic quotes 

during GTH2 that meet or exceed the 

heightened quoting standards 12 (which 

are the same as the heightened quoting 

standards in the GTH1 XSP LMM 

Incentive Program) in at least 85% of 

the series 90% of the time in a given 

month, the LMM will receive a payment 

for that month in the amount of $25,000 

(or pro-rated amount if an appointment 

begins after the first trading day of the 

month or ends prior to the last trading 

day of the month). For each of the XSP 

LMM Incentives Programs, the 

heightened quoting standards are based 

on the VIX Index value at the prior 

market close, with three separate value 

categories (i.e., VIX value at prior close 

less than 20, VIX value at prior close 

from 20 to 30, and VIX value at prior 

close greater than 30). 

The Exchange proposes to restructure 

the GTH1 and GTH2 XSP LMM 

Incentive Programs and adopt a new set 

of heightened quoting standards (which 

will apply to both programs). The 

proposed VIX Index value categories 

and heightened quoting standards for 

XSP options during each of GTH1 and 

GTH2 are as follows in the table below: 

Premium level 

Expiring 7 days or less Near term 8 days to 60 

days 

Mid term 61 days to 270 

days 

Long term 271 to 500 

days 

Width Size Width Size Width Size Width Size 

VIX Value at Prior Close <30 

$0.01–$1.00 ..................... $0.10 5 $0.11 5 $0.15 5 $0.25 5 

$1.01–$5.00 ..................... 0.15 5 0.15 5 0.20 5 0.30 5 

$5.01–$8.00 ..................... 0.25 5 0.30 5 0.40 5 0.60 5 

$8.01–$12.00 ................... 0.60 5 0.80 5 1.10 5 1.35 5 

$12.01–$20.00 ................. 1.00 5 1.30 5 1.80 5 2.20 5 

Greater than $20.00 ......... 2.00 5 2.40 5 2.80 5 3.60 5 

VIX Value at Prior Close ≥30 

$0.01–$1.00 ..................... 0.15 5 0.16 5 0.20 5 0.30 5 

$1.01–$5.00 ..................... 0.18 5 0.20 5 0.25 5 0.40 5 

$5.01–$8.00 ..................... 0.25 5 0.30 5 0.45 5 0.70 5 

$8.01–$12.00 ................... 0.60 5 0.90 5 1.20 5 1.50 5 

$12.01–$20.00 ................. 1.20 5 1.50 5 2.00 5 2.40 5 

Greater than $20.00 ......... 2.40 5 2.80 5 3.20 5 4.00 5 


ddrumheller on DSK120RN23PROD with NOTICES1

I I I I 
Federal Register / Vol. 89, No. 10 / Tuesday, January 16, 2024 / Notices 2685 

13 15 U.S.C. 78f(b). 

14 15 U.S.C. 78f(b)(5). 

15 Id. 

16 15 U.S.C. 78f(b)(4). 

The Exchange also proposes to 

increase the rebates offered by the GTH1 

and GTH2 XSP LMM Incentive 

Programs to an LMM appointed to the 

program for meeting the heightened 

quoting standards in a given month. The 

Exchange proposes to decrease such 

rebates from $20,000 to $15,000 for the 

GTH1 XSP LMM Incentive Program, and 

from $25,000 to $15,000 for the GTH2 

XSP LMM Incentive Program. 

Additionally, for the GTH1 XSP LMM 

Incentive Program, the Exchange 

proposes to eliminate the additional 

credit of $0.03 per contract applied to 

all XSP contracts executed in a MarketMaker capacity which provide liquidity 

in the Simple Book during RTH. 

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.13 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 14 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) 15 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,16 which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Trading Permit Holders and other 

persons using its facilities. 

The Exchange believes that it is 

reasonable to amend the monthly rebate 

amounts applicable to the MRUT, 

NANOS, GTH VIX/VIXW, and GTH1 

and GTH2 XSP LMM Incentive 

Programs. The Exchange notes that 

LMMs appointed to the respective 

programs will continue to receive a 

monthly rebate. The Exchange believes 

that the proposed rebate amounts are 

reasonably designed to continue to 

incentivize an LMM appointed to the 

respective program to meet the 

applicable quoting standards for MRUT, 

NANOS, VIX/VIXW, and XSP options, 

thereby providing liquid and active 

markets, which facilitates tighter 

spreads, increased trading 

opportunities, and overall enhanced 

market quality to the benefit of all 

market participants. 

The Exchange further believes that the 

proposed rule change to amend the 

rebate amounts received for MRUT 

($5,000), NANOS ($5,000), VIX 

($25,000), VIXW ($10,000), XSP 

($15,000 for each of GTH1 and GTH2) 

options is reasonable because they are 

comparable to the rebates offered by 

other LMM Incentive Programs offered 

by the Exchange. For example, the 

SPESG LMM Program currently offers 

$10,000 to appointed LMMs for SPESG 

options if the heightened quoting 

standards are met in a given month. The 

Exchange believes the amount of the 

rebate for each LMM Program remains 

commiserate with the quoting 

requirements of each of the LMM 

Incentive Programs, of which some 

standards are being restructured, as 

proposed. 

Similarly, the Exchange believes that 

the proposed rule changes to eliminate 

the volume incentive pool programs for 

the MRUT and NANOS LMM Incentive 

Programs and to eliminate the 

additional per contract credit incentives 

for the GTH VIX/VIXW and GTH1 XSP 

LMM Incentive Programs are reasonable 

because it is consistent with the rebate 

structures currently in place for other 

LMM Incentive Programs, in that most 

do not offer a volume incentive pool 

program or additional per contract 

credit incentive. The Exchange notes 

that it is not required to maintain the 

volume incentive pool or additional per 

contract credit incentive, and now 

wishes to eliminate them from the 

respective programs. 

The Exchange believes it is reasonable 

to decrease the series requirement for 

the NANOS and VIX/VIXW LMM 

Incentive Programs, and decrease the 

time requirement for MRUT LMM 

Incentive Program, as such changes are 

reasonably designed to slightly ease the 

difficulty in meeting the heightened 

quoting standards offered under these 

programs (for which an appointed LMM 

receives the respective rebates), which, 

in turn, provides increased incentive for 

LMMs appointed to these programs to 

provide significant liquidity in NANOS, 

VIX/VIXW, and MRUT options. Such 

liquidity benefits all market participants 

by providing more trading 

opportunities, tighter spreads, and 

added market transparency and price 

discovery, and signals to other market 

participants to direct their order flow to 

those markets, thereby contributing to 

robust levels of liquidity. 

Additionally, the Exchange believes 

that it is reasonable to restructure the 

VIX Index value categories and amend 

widths and sizes in the heightened 

quoting standards under the NANOS, 

VIX/VIXW and XSP LMM Incentive 

Programs, as these proposed new 

quoting requirements are overall 

reasonably designed to continue to 

encourage LMMs appointed to the 

respective incentive programs to 

provide significant liquidity in NANOS, 

VIX/VIXW and XSP options, which 

benefits investors overall by providing 

more trading opportunities, tighter 

spreads, and added market transparency 

and price discovery. Further, by 

restructuring the programs, the 

Exchange believes that the proposed 

rule changes are reasonably designed to 

reflect then-current market conditions 

and market characteristics in NANOS, 

VIX/VIXW and XSP options where the 

VIX Index may be experiencing higher 

volatility, and thus encourage LMMs 

appointed to the programs to meet the 

quoting standards to receive a rebate. 

Additionally, the proposed rule change 

is, in light of the restructuring of VIX 

Index value categories, generally 

designed to further align the lesser 

premium quote widths and size 

standards for NANOS, VIX/VIXW and 

XSP options with the more expensive 

premium quote width and size 

standards, in order to incentivize an 

increase in quoting activity and the 

provision of tighter markets for all 

premium levels. 

The Exchange also believes the 

proposed change to adopt a singular 

GTH VIX/VIXW LMM Incentive 

Program (as compared to separate GTH1 

and GTH2 VIX/VIXW LMM Incentive 

Programs) is reasonable. The Exchange 

believes the proposed changes are 

reasonably designed to continue to 

incentivize appointed LMMs to meet the 

proposed quoting standards for VIX/ 

VIXW, thereby providing liquid and 

active markets, which facilitates tighter 

spreads, increased trading 

opportunities, and overall enhanced 

market quality to the benefit of all 

market participants. Additionally, the 

Exchange believes that the proposed 

widths and sizes for the singular 

program are reasonable because they 

remain aligned with the current 

heightened standards in each program. 


ddrumheller on DSK120RN23PROD with NOTICES1
2686 Federal Register / Vol. 89, No. 10 / Tuesday, January 16, 2024 / Notices 

17See Securities Exchange Act Release No. 51808, 

70 FR 37495, 37498–99 (June 29, 2005) (S7–10–04) 

(Final Rule). 

18See Cboe Global Markets U.S. Options Market 

Volume Summary, Month-to-Date (December 18, 

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

options/market_statistics/. 

19See Securities Exchange Act Release No. 51808 

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

20See NetCoalition 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)). 

The Exchange believes that the 

proposed changes to the LMM Incentive 

Programs are equitable and not unfairly 

discriminatory. Specifically, the 

changes to the LMM Incentive Program 

will apply equally to any and all TPHs 

with LMM appointments to the MRUT, 

NANOS, GTH VIX/VIXW, and GTH1 

and GTH2 XSP LMM Incentive 

Programs, as applicable, that seek to 

meet the programs’ quoting standards in 

order to receive the rebates (as 

proposed) offered under each respective 

program. The Exchange additionally 

notes that, if an LMM appointed to any 

of the LMM Incentive Programs does not 

satisfy the corresponding heightened 

quoting standard for any given month, 

then it simply will not receive the rebate 

offered by the respective program for 

that month. 

Regarding each of the LMM Incentive 

Programs generally, the Exchange 

believes it is reasonable, equitable and 

not unfairly discriminatory to continue 

to offer these financial incentives, 

including as amended, to LMMs 

appointed to the programs, because it 

benefits all market participants trading 

in the corresponding products during 

RTH (for MRUT and NANOS) and GTH 

(for VIX/VIXW and XSP). These 

incentive programs encourage the 

LMMs appointed to such programs to 

satisfy the applicable quoting standards, 

which may increase liquidity and 

provide more trading opportunities and 

tighter spreads. Indeed, the Exchange 

notes that these LMMs serve a crucial 

role in providing quotes and the 

opportunity for market participants to 

trade MRUT, NANOS, VIX/VIXW, and 

XSP options, as applicable, which can 

lead to increased volume, providing for 

robust markets. The Exchange 

ultimately offers the LMM Incentive 

Programs, as amended, to sufficiently 

incentivize LMMs appointed to each 

incentive program to provide key 

liquidity and active markets in the 

corresponding program products during 

the corresponding trading sessions, and 

believes that these incentive programs, 

as amended, will continue to encourage 

increased quoting to add liquidity in 

each of the corresponding program 

products, thereby protecting investors 

and the public interest. The Exchange 

also notes that an LMM appointed to an 

incentive program may undertake added 

costs each month to satisfy that 

heightened quoting standards (e.g., 

having to purchase additional logical 

connectivity). 

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. First, the 

Exchange believes the proposed rule 

change does 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 existing LMM 

Incentive Programs will apply to all 

LMMs appointed to the applicable 

program classes (i.e., MRUT, NANOS, 

VIX/VIXW, and XSP) in a uniform 

manner. To the extent these LMMs 

appointed to an incentive program 

receive a benefit that other market 

participants do not, as stated, these 

LMMs in their role as Mark-Makers on 

the Exchange have different obligations 

and are held to different standards. For 

example, Market-Makers play a crucial 

role in providing active and liquid 

markets in their appointed products, 

thereby providing a robust market 

which benefits all market participants. 

Such Market-Makers also have 

obligations and regulatory requirements 

that other participants do not have. The 

Exchange also notes that an LMM 

appointed to an incentive program may 

undertake added costs each month to 

satisfy that heightened quoting 

standards (e.g., having to purchase 

additional logical connectivity). The 

Exchange also notes that the incentive 

programs are designed to attract 

additional order flow to the Exchange, 

wherein greater liquidity benefits all 

market participants by providing more 

trading opportunities, tighter spreads, 

and added market transparency and 

price discovery, and signals to other 

market participants to direct their order 

flow to those markets, thereby 

contributing to robust levels of liquidity. 

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.’’ 17

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

as the LMM Incentive Programs apply 

only to transactions in products 

exclusively listed on the Exchange. As 

noted above, the incentive programs are 

designed to attract additional order flow 

to the Exchange, wherein greater 

liquidity benefits all market participants 

by providing more trading 

opportunities, tighter spreads, and 

added market transparency and price 

discovery, and signals to other market 

participants to direct their order flow to 

those markets, thereby contributing to 

robust levels of liquidity. The Exchange 

notes that it operates in a highly 

competitive market. TPHs have 

numerous alternative venues that they 

may participate on and direct their 

order flow, including 16 other options 

exchanges, as well as off-exchange 

venues, where competitive products are 

available for trading. Based on publicly 

available information, no single options 

exchange has more than 12% of the 

market share.18 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, additionally 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.’’ 19 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’. . . .’’.20 Accordingly, the 

Exchange does not believe its proposed 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 10 / Tuesday, January 16, 2024 / Notices 2687 

21 15 U.S.C. 78s(b)(3)(A). 

22 17 CFR 240.19b–4(f). 23 17 CFR 200.30–3(a)(12). 

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 21 and paragraph (f) of Rule 

19b–4 22 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– 

CBOE–2024–001 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–CBOE–2024–001. 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–CBOE–2024–001 and should be 

submitted on or before February 6, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.23

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–00639 Filed 1–12–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. IC– 

35087; 812–15495] 

Elevation Series Trust and Sovereign’s 

Capital Management, LLC 

January 9, 2024. 

AGENCY: Securities and Exchange 

Commission (‘‘Commission’’ or ‘‘SEC’’). 

ACTION: Notice. 

Notice of an application under section 

6(c) of the Investment Company Act of 

1940 (‘‘Act’’) for an exemption from 

section 15(a) of the Act, as well as from 

certain disclosure requirements in rule 

20a–1 under the Act, Item 19(a)(3) of 

Form N–1A, Items 22(c)(1)(ii), 

22(c)(1)(iii), 22(c)(8) and 22(c)(9) of 

Schedule 14A under the Securities 

Exchange Act of 1934, and Sections 6– 

07(2)(a), (b), and (c) of Regulation S–X 

(‘‘Disclosure Requirements’’). 

SUMMARY OF APPLICATION: The requested 

exemption would permit Applicants to 

enter into and materially amend 

subadvisory agreements with certain 

subadvisors without shareholder 

approval and grant relief from the 

Disclosure Requirements as they relate 

to fees paid to the subadvisors. 

APPLICANTS: Elevation Series Trust and 

Sovereign’s Capital Management, LLC. 

FILING DATES: The application was filed 

on August 10, 2023, and amended on 

November 30, 2023. 

HEARING OR NOTIFICATION OF HEARING: An 

order granting the requested relief will 

be issued unless the Commission orders 

a hearing. Interested persons may 

request a hearing on any application by 

emailing the SEC’s Secretary at 

Secretarys-Office@sec.gov and serving 

the Applicants with a copy of the 

request by email, if an email address is 

listed for the relevant Applicant below, 

or personally or by mail, if a physical 

address is listed for the relevant 

Applicant below. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on February 5, 2024, and 

should be accompanied by proof of 

service on the Applicants, in the form 

of an affidavit, or, for lawyers, a 

certificate of service. Pursuant to rule 0– 

5 under the Act, hearing requests should 

state the nature of the writer’s interest, 

any facts bearing upon the desirability 

of a hearing on the matter, the reason for 

the request, and the issues contested. 

Persons who wish to be notified of a 

hearing may request notification by 

emailing the Commission’s Secretary. 

ADDRESSES: The Commission: 

Secretarys-Office@sec.gov. Applicants: 

JoAnn M. Strasser, JoAnn.Strasser@

thompsonhine.com and Christopher 

Moore, Elevation Series Trust c/o 

Sovereign’s Capital Management, LLC, 

1700 Broadway, Suite 1850, Denver, CO 

80290. 

FOR FURTHER INFORMATION CONTACT: Jean 

E. Minarick, Senior Counsel, or Kyle R. 

Ahlgren, Branch Chief, at (202) 551– 

6825 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: For 

Applicants’ representations, legal 

analysis, and conditions, please refer to 

Applicants’ amended application, dated 

November 30, 2023, which may be 

obtained via the Commission’s website 

by searching for the file number at the 

top of this document, or for an 

Applicant using the Company name 

search field on the SEC’s EDGAR 

system. 

The SEC’s EDGAR system may be 

searched at https://www.sec.gov/edgar/ 

searchedgar/legacy/ 

companysearch.html. You may also call 

the SEC’s Public Reference Room at 

(202) 551–8090. 


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