11888 Federal Register / Vol. 89, No. 32 / Thursday, February 15, 2024 / Notices 

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

2 17 CFR 240.19b–4. 

3See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (January 23, 

2024), available at https://www.cboe.com/us/ 

equities/market_statistics/. 4See BZX Equities Fee Schedule, Standard Rates. 

5 Id. 

6See Rule 11.9(c)(18). A ‘‘Supplemental Peg 

Order’’ is a non-displayed limit order that posts to 

the BZX Book and thereafter is eligible for 

execution at the NBB for buy orders and NBO for 

sell orders against routable orders that are equal to 

or less than the aggregate size of the Supplemental 

Peg Order interest available at that price. 

7See e.g., BZX Equities Fee Schedule, Fee Codes 

HB, HV, and HY. Each of the aforementioned fee 

codes provides a rebate of $0.00080 per share in 

securities priced at or above $1.00 for nondisplayed orders that add liquidity in Tapes B, A, 

and C securities, respectively. 

8Fee code B is appended to displayed orders that 

add liquidity to BZX in Tape B securities. 

9Fee code V is appended to displayed orders that 

add liquidity to BZX in Tape A securities. 

10Fee code Y is appended to displayed orders 

that add liquidity to BZX in Tape C securities. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99507; File No. SR– 

CboeBZX–2024–011] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend its 

Equities Fee Schedule 

February 9, 2024. 

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 February 

1, 2024, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) 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 also available on the Exchange’s 

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

equities/regulation/rule_filings/BZX/), 

at the Exchange’s Office of the 

Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fee Schedule applicable to its equities 

trading platform (‘‘BZX Equities’’) by (1) 

modifying the rate associated with fee 

code RP; (2) modifying the criteria of 

Add Volume Tier 3; and (3) removing 

certain tiers from the Fee Schedule. The 

Exchange proposes to implement these 

changes effective February 1, 2024. 

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,3 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.4 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.5 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. 

Fee Code RP 

The Exchange currently offers fee 

code RP, which is appended to nondisplayed orders that add liquidity to 

the Exchange using a Supplemental Peg 

Order.6 Currently, orders appended 

with fee code RP are provided a rebate 

of $0.00170 per share in securities 

priced at or above $1.00. For securities 

appended with fee code RP priced 

below $1.00 the Exchange does not 

provide a rebate or assess a fee. Now the 

Exchange proposes to lower the rebate 

amount associated with fee code RP 

from $0.00170 per share to $0.00080 per 

share in securities priced at or above 

$1.00. The Exchange does not propose 

to change its pricing for orders 

appended with fee code RP in securities 

priced below $1.00. The Exchange notes 

that this change is being made in order 

to align the rebate associated with fee 

code RP with other fee codes on the 

Exchange that provide a rebate for nondisplayed orders.7

Add/Remove Volume Tiers 

Under footnote 1 of the Fee Schedule, 

the Exchange offers various Add/ 

Remove Volume Tiers. In particular, the 

Exchange offers eight Add Volume Tiers 

that provide enhanced rebates for orders 

yielding fee codes B,8 V 9 and Y 10 where 

a Member reaches certain add volumebased criteria. First, the Exchange 

proposes to modify the criteria of Add 

Volume Tier 3. The current criteria for 

Add Volume Tier 3 is as follows: 

• Add Volume Tier 3 provides a 

rebate of $0.0027 per share in securities 

priced at or above $1.00 to qualifying 

orders (i.e., orders yielding fee codes B, 

V, or Y) where a Member has an 


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Federal Register / Vol. 89, No. 32 / Thursday, February 15, 2024 / Notices 11889 

11 ‘‘ADAV’ means average daily added volume 

calculated as the number of shares added per day. 

ADAV is calculated on a monthly basis. 

12 ‘‘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. 

13Fee code HB is appended to non-displayed 

orders that add liquidity to BZX in Tape B 

securities. 

14Fee code HV is appended to non-displayed 

orders that add liquidity to BZX in Tape A 

securities. 

15Fee code HY is appended to non-displayed 

orders that add liquidity to BZX in Tape C 

securities. 

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

17 15 U.S.C. 78f(b)(5). 

18 Id. 

19 15 U.S.C. 78f(b)(4). 

20See e.g., EDGX Equities Fee Schedule, Footnote 

1, Add/Remove Volume Tiers. 

21See e.g., BZX Equities Fee Schedule, Footnote 

1, Add/Remove Volume Tiers. 22Supra note 7. 

ADAV 11 as a percentage of TCV 12 ≥ 

0.25% or Member has an ADAV ≥ 

25,000,000. 

The proposed criteria for Add Volume 

Tier 3 is as follows: 

• Add Volume Tier 3 provides a 

rebate of $0.0027 per share in securities 

priced at or above $1.00 to qualifying 

orders (i.e., orders yielding fee codes B, 

V, or Y) where a Member has an ADAV 

as a percentage of TCV ≥ 0.30% or 

Member has an ADAV ≥ 30,000,000. 

The proposed modification to Add 

Volume Tier 3 represents a modest 

increase in difficulty to achieve the 

applicable tier threshold while 

maintaining the existing rebate. The 

Exchange believes that the proposed 

criteria continues to be commensurate 

with the rebate received and will 

encourage Members to grow their 

volume on the Exchange. Increased 

volume on the Exchange contributes to 

a deeper and more liquid market, which 

benefits all market participants and 

provides greater execution opportunities 

on the Exchange. 

In addition to the proposed 

modification to Add Volume Tier 3, the 

Exchange now proposes to delete Add 

Volume Tier 8 as the Exchange does not 

wish to, nor is required to, maintain 

such tier. More specifically, the 

proposed change removes this tier as the 

Exchange would rather redirect future 

resources and funding into other 

programs and tiers intended to 

incentivize increased order flow. 

Additionally, under footnote 1, the 

Exchange offers five Non-Displayed Add 

Volume Tiers which provide enhanced 

rebates for orders yielding fee codes 

HB,13 HV,14 or HY 15 where a Member 

reaches certain add volume-based 

criteria. The Exchange now proposes to 

delete Non-Displayed Add Volume Tier 

6 as the Exchange does not wish to, nor 

is required to, maintain such tier. More 

specifically, the proposed change 

removes this tier as the Exchange would 

rather redirect future resources and 

funding into other programs and tiers 

intended to incentivize increased order 

flow. 

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.16 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 17 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) 18 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) 19 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 

modify Add 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. Additionally, the 

Exchange notes that relative volumebased incentives and discounts have 

been widely adopted by exchanges,20

including the Exchange,21 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 or 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. 

In particular, the Exchange believes 

its proposal to modify Add Volume Tier 

3 is reasonable because the revised tier 

will be available to all Members and 

provide all Members with an 

opportunity to receive an enhanced 

rebate. The Exchange further believes 

the proposed modification to Add 

Volume Tier 3 will provide a reasonable 

means to encourage liquidity adding 

displayed orders 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 

opportunity to receive an enhanced 

rebate on qualifying orders. An overall 

increase in activity would deepen the 

Exchange’s liquidity pool, offer 

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 Add Volume Tier 

3 are reasonable as they do not represent 

a significant departure from the criteria 

currently offered in the Fee Schedule. 

Further, the Exchange believes its 

proposed change to fee code RP is 

reasonable as this change does not 

represent a significant departure from 

the Exchange’s general pricing structure. 

The Exchange notes that the proposed 

change to fee code RP are intended to 

align the rebate associated with 

Supplemental Peg Orders with existing 

rebates offered by the Exchange for 

other non-displayed orders adding 

liquidity to the Exchange.22 The 

Exchange also believes that the proposal 

represents an equitable allocation of fees 

and rebates and is not unfairly 

discriminatory because all Members 

continue to be eligible for the proposed 

Add Volume Tier 3 and have the 

opportunity to meet the tier’s criteria 

and receive the corresponding enhanced 

rebate if such criteria is met. Without 

having a view of activity on other 

markets and off-exchange venues, the 

Exchange has no way of knowing 

whether this proposed rule change 

would definitely result in any Members 

qualifying for proposed Add Volume 


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23Supra note 3. 

24See Securities Exchange Act Release No. 51808 

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

25NetCoalition 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)). 

26 15 U.S.C. 78s(b)(3)(A). 

27 17 CFR 240.19b–4(f). 

Tier 3. While the Exchange has no way 

of predicting with certainty how the 

proposed changes will impact Member 

activity, based on the prior month’s 

volume, the Exchange anticipates that at 

least one Member will be able to satisfy 

proposed Add 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 Member will merely not 

receive that corresponding enhanced 

rebate. 

The Exchange believes that its 

proposal to eliminate Add Volume Tier 

8 and Non-Displayed Add Volume Tier 

6 is reasonable because the Exchange is 

not required to maintain these tiers nor 

is it required to provide Members an 

opportunity to receive enhanced 

rebates. The Exchange believes its 

proposal to eliminate the tiers is also 

equitable and not unfairly 

discriminatory because it applies to all 

Members (i.e., the tiers will not be 

available for any Member). The 

Exchange also notes that the proposed 

rule change to remove these tiers merely 

results in Members not receiving an 

enhanced rebate, which, as noted above, 

the Exchange is not required to offer or 

maintain. Furthermore, the proposed 

rule change to eliminate the tiers 

enables the Exchange to redirect 

resources and funding into other 

programs and tiers intended to 

incentivize increased order flow. 

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 change 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 modification to Add 

Volume Tier 3 and the proposed lower 

rebate associated with fee code RP will 

apply to all Members equally in that all 

Members are eligible for the modified 

tier and lower rebate, have a reasonable 

opportunity to meet the proposed tier’s 

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, enhance 

competition as they are intended to 

increase the competitiveness of BZX by 

amending existing 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. 

Additionally, the Exchange believes 

the proposed elimination of Add 

Volume Tier 8 and Non-Displayed Add 

Volume Tier 6 does not impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Specifically, the proposed change to 

eliminate Add Volume Tier 8 and NonDisplayed Add Volume Tier 6 will not 

impose any burden on intramarket 

competition because the changes apply 

to all Members uniformly, as in, the 

tiers will no longer be available to any 

Member. 

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.23

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.’’ 24 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’. . . .’’.25 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 26 and paragraph (f) of Rule 

19b–4 27 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 


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Federal Register / Vol. 89, No. 32 / Thursday, February 15, 2024 / Notices 11891 

28 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. Equities Market 

Volume Summary, Month-to-Date (January 26, 

2024), available at https://www.cboe.com/us/ 

equities/market_statistics/. 

4See BYX Equities Fee Schedule, Standard Rates. 

5 Id. 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CboeBZX–2024–011 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–CboeBZX–2024–011. 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–CboeBZX–2024–011 and should be 

submitted on or before March 7, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–03097 Filed 2–14–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99508; File No. SR– 

CboeBYX–2024–005] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend its 

Fee Schedule Regarding Periodic 

Auctions 

February 9, 2024. 

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 February 

1, 2024, Cboe BYX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe BYX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’) 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 also available on the Exchange’s 

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

equities/regulation/rule_filings/BYX/), 

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 (‘‘BYX Equities’’) by 

modifying the rate associated with fee 

code AU in securities priced at or above 

$1.00. The Exchange proposes to 

implement these changes effective 

February 1, 2024. 

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,3 no single 

registered equities exchange has more 

than 13% 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 

‘‘Taker-Maker’’ model whereby it pays 

credits to members that remove 

liquidity and assesses fees to those that 

add liquidity. The Exchange’s Fee 

Schedule sets forth the standard rebates 

and rates applied per share for orders 

that remove and provide liquidity, 

respectively. Currently, for orders in 

securities priced at or above $1.00, the 

Exchange provides a standard rebate of 

$0.00200 per share for orders that 

remove liquidity and assesses a fee of 

$0.00200 per share for orders that add 

liquidity.4 For orders in securities 

priced below $1.00, the Exchange does 

not assess any fees for orders that add 

liquidity, and provides a rebate in the 

amount of 0.10% of the total dollar 

value for orders that remove liquidity.5


khammond on DSKJM1Z7X2PROD with NOTICES