Federal Register / Vol. 89, No. 34 / Tuesday, February 20, 2024 / Notices 12917 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange originally filed to amend the Fee 

Schedule on February 1, 2024 (SR–NYSEArca– 

2024–14) and withdrew such filing on February 12, 

2024. 

5See Fee Schedule, Limit of Fees on Options 

Strategy Executions, available here: https://

www.nyse.com/publicdocs/nyse/markets/ 

arcaoptions/NYSE_Arca_Options_Fee_

Schedule.pdf. 

6See id., Endnote 10 (describing each Strategy 

Execution). 

7See proposed Fee Schedule, Limit of Fees on 

Options Strategy Executions. 

8The Exchange notes that at least three other 

options exchanges offer a daily fee cap on certain 

option strategies, which caps range from as little $0 

(on Cboe Exchange, Inc. (‘‘Cboe’’) to as much as 

$1,100 (on Nasdaq PHLX LLC (‘‘PHLX ’’) and differ 

based on the specific strategies executed and the 

type of market participants on the trade. See, e.g., 

Cboe Fee Schedule, Footnote 13, available here: 

https://cdn.cboe.com/resources/membership/Cboe_

FeeSchedule.pdf; PHLX Options 7, Pricing 

Schedule, Section 4 (Strategy Caps), available here: 

https://listingcenter.nasdaq.com/rulebook/phlx/ 

rules/Phlx%20Options%207. See also BOX Options 

Market LLC (‘‘BOX’’) Fee Schedule, Section V.D, 

Strategy Qualified Open Outcry ‘‘QOO’’ Order Fee 

Cap and Rebate, available here: https://

boxexchange.com/regulatory/fees/. Despite the 

nuances in how each option exchange applies the 

various strategy caps, the Exchange directly 

competes with these exchanges for order flow in 

options strategy executions. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99532; File No. SR– 

NYSEARCA–2024–15] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Modify the NYSE Arca 

Options Fee Schedule 

February 13, 2024. 

Pursuant to Section 19(b)(1) 1 of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on February 

12, 2024, NYSE Arca, Inc. (‘‘NYSE 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. 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 modify the 

NYSE Arca Options Fee Schedule (‘‘Fee 

Schedule’’) regarding the Limit of Fees 

on Options Strategy Executions. The 

Exchange proposes to implement the fee 

change effective February 12, 2024.4

The proposed rule change is available 

on the Exchange’s website at 

www.nyse.com, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

self-regulatory organization 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 those statements may be examined at 

the places specified in Item IV below. 

The Exchange has prepared summaries, 

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

of the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

the Fee Schedule to modify the Limit of 

Fees on Options Strategy Executions 

(the ‘‘Strategy Cap’’ or ‘‘Cap’’), effective 

February 12, 2024. 

Background 

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 16% of the market share of 

executed volume of multiply-listed 

equity and ETF options trades. 

Therefore, no exchange possesses 

significant pricing power in the 

execution of multiply-listed equity and 

ETF options order flow. More 

specifically, in December 2023, the 

Exchange had less than 13% market 

share of executed volume of multiplylisted equity and ETF options trades. 

Thus, in such a low-concentrated and 

highly competitive market, no single 

options exchange possesses significant 

pricing power in the execution of option 

order flow. 

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow, or discontinue 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. In response to the competitive 

environment, the Exchange offers 

specific rates and credits in its Fees 

Schedule, as do other competing 

options exchanges, which the Exchange 

believes provide incentive to OTP 

Holder and OTP Firms (collectively, 

‘‘OTP Holders’’) to increase order flow 

of certain qualifying orders—the 

Strategy Cap (as described below) is one 

such incentive. 

Proposed Fee Change 

Currently, the Fee Schedule provides 

that transaction fees for OTP Holders are 

limited or capped at $1,000 for certain 

options strategy executions ‘‘on the 

same trading day,’’ meaning the Strategy 

Cap is a daily fee cap.5 Strategy 

executions that qualify for the Strategy 

Cap are (a) reversals and conversions, 

(b) box spreads, (c) short stock interest 

spreads, (d) merger spreads, (e) jelly 

rolls, and (f) dividends, which are 

described in detail in the Fee Schedule 

(the ‘‘Strategy Executions’’).6 The 

Exchange also offers a lower daily 

Strategy Cap of $200 for OTP Holders 

that trade at least 25,000 monthly 

billable contract sides in Strategy 

Executions (the ‘‘minimum billable 

sides requirement’’). Thus, the Exchange 

caps the daily Strategy Execution fees at 

$200 for each day of the month (as 

opposed to $1,000 for nonqualifying 

OTP Holders) for OTP Holders that meet 

the minimum billable sides 

requirement. 

The Exchange proposes to reduce the 

Strategy Cap from $1,000 to $200 and to 

remove the minimum billable sides 

requirement to qualify for this lower 

$200 daily Cap. Put another way, the 

Exchange proposes to cap daily fees for 

Strategy Executions at $200 for each day 

of the month regardless of an OTP 

Holder’s monthly billable volume in 

Strategy Executions.7

The Exchange notes that the proposed 

fee change is designed to compete with 

other options exchanges that likewise 

cap fees on certain options strategies.8

Therefore, the Exchange believes the 

proposed reduction of the Strategy Cap 

may further incentivize OTP Holders to 

direct Strategy Executions to the 

Exchange. 


ddrumheller on DSK120RN23PROD with NOTICES1
12918 Federal Register / Vol. 89, No. 34 / Tuesday, February 20, 2024 / Notices 

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

10 15 U.S.C. 78f(b)(4) and (5). 

11See, e.g., supra note 8 (describing similar fee 

caps available on Cboe, PHLX, and BOX). 

12See, e.g., supra note 8 (describing similar fee 

caps available on Cboe, PHLX, and BOX). 

13 Id. 

14 15 U.S.C. 78s(b)(3)(A). 

15 17 CFR 240.19b–4(f)(2). 

16 15 U.S.C. 78s(b)(2)(B). 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,9 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,10 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers or dealers. 

The Exchange believes that the 

proposed change to the Strategy Cap is 

reasonable, equitable, and not unfairly 

discriminatory. As noted above, the 

Exchange operates in highly competitive 

market. The Exchange is only one of 

several options venues to which market 

participants may direct their order flow, 

and it represents a small percentage of 

the overall market. As such, 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 

the proposed fee change is reasonable, 

equitable, and not unfairly 

discriminatory in that the Exchange and 

competing options exchanges currently 

offer reduced fees or credits in 

connection with strategy orders.11

The Exchange notes that the proposed 

change would be applied uniformly to 

all similarly-situated OTP Holders. 

Moreover, the Exchange believes that 

the proposed change would further 

incentivize OTP Holder [sic] to direct 

Strategy Executions to the Exchange and 

may encourage them to aggregate their 

Strategy Executions at the Exchange as 

the primary execution venue. For 

example, this proposed change may 

encourage OTP Holders to increase their 

Strategy Execution volumes by 

executing (often smaller) strategies that 

are not necessarily economically viable 

on a per symbol basis, but which may 

be profitable when fees on Strategy 

Executions—regardless of symbol—are 

capped for the trading day. To the 

extent that the proposed change attracts 

more Strategy Executions, this increased 

order flow may make the Exchange a 

more competitive venue for order 

execution. In addition, the Exchange 

notes that all market participants stand 

to benefit from increased volume, which 

promotes market depth, facilitates 

tighter spreads, and enhances price 

discovery, and may lead to a 

corresponding increase in order flow 

from other market participants. 

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow or discontinue or 

reduce use of certain categories of 

products, in response to fee changes. 

Accordingly, competitive forces 

constrain options exchange transaction 

fees. Stated differently, changes to 

exchange transaction fees can have a 

direct effect on the ability of an 

exchange to compete for order flow. The 

Exchange believes the proposed change 

is a reasonable attempt to effectively 

compete for Strategy Executions. The 

Exchange believes that the proposed 

change may encourage OTP Holders to 

conduct Strategy Executions on the 

Exchange and, in turn, may increase the 

depth of the market to the benefit of all 

market participants. The Exchange notes 

that OTP Holders may avail themselves 

of the Exchange’s proposed Strategy Cap 

or they can opt for similar offerings at 

another exchange.12

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act, the Exchange does not believe 

that the proposed rule change would 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The proposed change is designed to 

attract additional order flow to the 

Exchange, particularly Strategy 

Executions. In particular, the Exchange 

believes that the proposed change could 

further incentivize market participants 

to direct their Strategy Executions to the 

Exchange. As noted herein, the 

proposed Strategy Cap would be 

applicable to all similarly-situated 

market participants, and, as such, the 

proposed change would not impose a 

disparate burden on competition among 

OTP Holders. The Exchange believes 

that the proposed change may continue 

to encourage OTP Holders to conduct 

Strategy Executions on the Exchange, 

which increased liquidity and quote 

competition on the Exchange benefits 

all market participants. 

The Exchange also does not believe 

that the proposed Strategy Cap will 

impose any burden on intermarket 

competition that is not necessary or 

appropriate in furtherance of the Act 

because, as noted above, other 

competing options exchanges currently 

has [sic] a similar fee cap in place in 

connection with strategy orders.13

Because competitors are free to modify 

their own fees or fee caps in response 

to competing exchanges, the Exchange 

believes that the degree to which 

changes in this market may impose any 

burden on competition is limited. 

Further, the Exchange believes that the 

proposed change could promote 

competition between the Exchange and 

other execution venues, including those 

that currently offer similar strategy 

order fees or fee caps. Finally, the 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues. In such an 

environment, the Exchange must 

continually review, and consider 

adjusting, its fees and credits to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed 

rule change reflects this competitive 

environment. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change is effective 

upon filing pursuant to Section 

19(b)(3)(A) 14 of the Act and 

subparagraph (f)(2) of Rule 19b–4 15

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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 shall institute proceedings 

under Section 19(b)(2)(B) 16 of the Act 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, 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 34 / Tuesday, February 20, 2024 / Notices 12919 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See the Nasdaq Stock Market LLC (‘‘Nasdaq’’) 

listing rules series 5200 (General Procedures and 

Prerequisites for Initial and Continued Listing on 

the Nasdaq Stock Market), 5600 (Corporate 

Governance Requirements), and 5800 (Failure to 

Meeting Listing Standards). Additionally, the chart 

provided in Item 8 below summarizes each Nasdaq 

Rule and each corresponding proposed Exchange 

Rule. 

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– 

NYSEARCA–2024–15 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–NYSEARCA–2024–15. 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–NYSEARCA–2024–15 and should be 

submitted on or before March 12, 2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–03337 Filed 2–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99524; File No. SR– 

CboeBZX–2024–010] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Corporate Governance Requirements, 

as Provided Under Exchange Rule 

14.10 and Make Certain Other Changes 

to Its Listing Rules as Provided Under 

Exchange Rules 14.3, 14.6, 14.7, and 

14.12 

February 13, 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 

29, 2024, Cboe BZX Exchange, Inc. (the 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the self-regulatory organization. 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 Corporate Governance 

Requirements, as provided under 

Exchange Rule 14.10 and make certain 

other changes to its listing rules as 

provided under Exchange Rules 14.3, 

14.6, 14.7, and 14.12. 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 (https://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 the 

corporate governance requirements as 

provided under Exchange Rule 14.10 

and make certain other related changes 

to its listing rules as provided under 

Exchange Rules 14.3, 14.6, 14.7, and 

14.12. The proposed changes are 

substantively similar to the equivalent 

rule on another exchange.3 Specifically, 

the proposed changes will (1) modify 

the compensation-related listing rules to 

align with that of other exchanges; (2) 

modify the exemption to the Direct 

Registration Program (‘‘DRP’’) 

requirement as it pertains to foreign 

issuers; (3) require listed Companies to 

publicly disclose compensation or other 

payments by third parties to any 

nominee for director or sitting director 

in connection with their candidacy for 

or service on the Companies’ Board of 

Directors; (4) modify the listing 

requirements to change the definition of 

market value for purposes of the 

shareholder approval rules and 

eliminate the requirement for 

shareholder approval of issuances at a 

price less than book value but greater 

than market value; (5) modify and 

clarify the exemptions from certain 

corporate governance requirements; (6) 

modify the definition of a ‘‘Family 

Member’’ as defined in Rule 14.10; (7) 

modify the quorum requirement 

applicable to a non-U.S. company where 

such company’s home country law is in 

direct conflict with the Exchange’s 

quorum requirement; and (8) modify 

rule numbers and make other 

ministerial clarifying changes. As noted 

above, the proposed changes would 

result in Exchange Rules that are 

substantively similar to the existing 

rules of Nasdaq and are supported by 

prior Commission approval orders and 

immediately effective exchange 

proposals, as discussed in further detail 

below. 


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