Federal Register / Vol. 89, No. 201 / Thursday, October 17, 2024 / Notices 83743 

20See Securities Exchange Act Release No. 51808 

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

21NetCoalition 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)). 

22 15 U.S.C. 78s(b)(3)(A). 

23 17 CFR 240.19b–4(f). 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

that choose to use Dedicated Cores. As 

discussed above, Dedicated Cores are 

optional and Users may choose to 

utilize Dedicated Cores, or not, based on 

their views of the additional benefits 

and added value provided by utilizing 

a Dedicated Core. The Exchange 

believes the proposed fee will be 

assessed proportionately to the potential 

value or benefit received by Users with 

a greater number of Dedicated Cores and 

notes that Users may determine at any 

time to cease using Dedicated Cores. As 

discussed, Users can also continue to 

access the Exchange through shared 

CPU Cores at no additional cost. Finally, 

all Users will be entitled to two 

Dedicated Cores at no additional cost. 

Next, the Exchange believes the 

proposed rule change does not impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 

As previously discussed, the Exchange 

operates in a highly competitive market, 

including competition for exchange 

memberships. Market Participants have 

numerous alternative venues that they 

may participate on, including 15 other 

equities exchanges, as well as offexchange venues, where competitive 

products are available for trading. 

Indeed, participants can readily choose 

to submit their order flow to other 

exchange and off-exchange venues if 

they deem fee levels at those other 

venues to be more favorable. Moreover, 

the Commission has repeatedly 

expressed its preference for competition 

over regulatory intervention in 

determining prices, products, and 

services in the securities markets. 

Specifically, in Regulation NMS, the 

Commission highlighted the importance 

of market forces in determining prices 

and SRO revenues and, also, recognized 

that current regulation of the market 

system ‘‘has been remarkably successful 

in promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 20 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’. . . .’’.21 Accordingly, the 

Exchange does not believe its proposed 

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 22 and paragraph (f) of Rule 

19b–4 23 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– 

CboeBYX–2024–036 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–CboeBYX–2024–036. 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–CboeBYX–2024–036 and should be 

submitted on or before November 7, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–23902 Filed 10–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101300; File No. SR–BX– 

2024–038] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend BX Options 7, 

Section 2 

October 10, 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 

September 27, 2024, Nasdaq BX, Inc. 

(‘‘BX’’ or ‘‘Exchange’’) filed with the 


ddrumheller on DSK120RN23PROD with NOTICES1
83744 Federal Register / Vol. 89, No. 201 / Thursday, October 17, 2024 / Notices 

3The term ‘‘Lead Market Maker’’ or (‘‘LMM’’) 

applies to a registered BX Options Market Maker 

that is approved pursuant to Options 2, Section 3 

to be the LMM in an options class (options classes). 

See Options 7, Section 1(c). 

4The term ‘‘BX Options Market Maker’’ or (‘‘M’’) 

is a Participant that has registered as a Market 

Maker on BX Options pursuant to Options 2, 

Section 1, and must also remain in good standing 

pursuant to Options 2, Section 9. In order to receive 

Market Maker pricing in all securities, the 

Participant must be registered as a BX Options 

Market Maker in at least one security. See Options 

7, Section 1(c). 

5The term ‘‘Customer’’ or (‘‘C’’) applies to any 

transaction that is identified by a Participant for 

clearing in the Customer range at The Options 

Clearing Corporation (‘‘OCC’’) which is not for the 

account of broker or dealer or for the account of a 

‘‘Professional’’ (as that term is defined in Options 

1, Section 1(a)(48)). See Options 7, Section 1(c). 

6The term ‘‘Non-Customer’’ applies to 

transactions for the accounts of Lead Market 

Makers, Market Makers, Firms, Professionals, 

Broker-Dealers and JBOs. See Options 7, Section 

1(c). 

7The term ‘‘Firm’’ applies to any transaction that 

is identified by a member or member organization 

for clearing in the Firm range at OCC. See Options 

7, Section 1(c). 

8See Options 7, Section 1(a). 

9As discussed below, the note 2 incentives sunset 

on September 30, 2024 (including the growth 

incentive). Today, the Exchange uses this time 

period to evaluate the proposed growth incentive 

criteria to determine whether the parameters are 

appropriately designed to incentivize LMMs and 

MMs in the intended manner. 

10See, e.g., Securities Exchange Act Release Nos. 

97148 (March 15, 2023), 88 FR 17068 (March 21, 

2023) (SR–MRX–2023–07) (establishing growth 

incentive for MRX Market Makers); and 97440 (May 

5, 2023), 88 FR 30370 (May 11, 2023) (SR–MRX– 

2023–08) (adding an expiration date for the MRX 

growth incentive). MRX subsequently eliminated 

this growth incentive upon reaching the expiration 

date. See Securities Exchange Act Release No. 

97800 (June 26, 2023), 88 FR 42409 (June 30, 2023) 

(SR–MRX–2023–11). 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Items I, II, and III below, 

which Items have been prepared by the 

Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to amend the 

Exchange’s Pricing Schedule at Options 

7, Section 2(1). 

While the changes proposed herein 

are effective upon filing, the Exchange 

has designated that the amendments be 

operative on October 1, 2024. 

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/rules, at the principal office 

of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend a 

number of incentives for Lead Market 

Makers (‘‘LMMs’’),3 Market Makers 

(‘‘MMs’’),4 and Customers 5 at BX 

Options 7, Section 2(1). 

Today, in Penny Symbols, the 

Exchange pays the following Maker 

Rebates: Lead Market Makers a Maker 

Rebate of $0.24 per contract; Market 

Makers a Maker Rebate of $0.20 per 

contract; Non-Customer 6 and Firm 7 a 

Maker Rebate of $0.12 per contract; and 

Customer a Maker Rebate of $0.30 per 

contract. Today, in Penny Symbols, the 

Exchange pays the following Taker Fees: 

Lead Market Makers, Market Makers, 

Non-Customer and Firm a Taker Fee of 

$0.50 per contract; and Customer a 

Taker Fee of $0.40 per contract. 

Today, in Non-Penny Symbols, the 

Exchange pays the following Maker 

Rebates/Fees: Lead Market Makers a 

Maker Rebate of $0.45 per contract; 

Market Makers a Maker Rebate of $0.40 

per contract; Non-Customer and Firm a 

Maker Fee of $0.45 per contract; and 

Customer a Maker Rebate of $1.10 per 

contract. Today, in Non-Penny Symbols, 

the Exchange pays the following Taker 

Fees: Lead Market Makers, Market 

Makers, Non-Customer and Firm a 

Taker Fee of $1.25 per contract; and 

Customer a Taker Fee of $0.79 per 

contract. 

Note 2 Incentive 

The Exchange proposes to amend the 

incentives in note 2 of Options 7, 

Section 2(1) that currently provide: 

Lead Market Makers and Market Makers 

that either (1) execute more than 0.45% 

Customer Total Consolidated Volume 

(‘‘TCV’’) per day which adds liquidity in a 

given month (excluding Lead Market Maker 

and Market Maker volume which adds 

liquidity in SPY), or (2) increase their 

combined Lead Market Maker and Market 

Maker volume which adds liquidity in a 

given month by at least 70% above their 

March 2024 volume as measured by a 

percentage of TCV (excluding Lead Market 

Maker and Market Maker volume which adds 

liquidity in SPY), will receive the following 

incentives: (i) an additional $0.05 per 

contract Maker Rebate in Penny Symbols 

excluding SPY, (ii) an additional $0.01 per 

contract Maker Rebate in SPY, and (iii) an 

additional $0.24 per contract Maker Rebate in 

Non-Penny Symbols. Lead Market Makers 

and Market Makers with no volume in the 

add liquidity segment for the month of March 

2024 may qualify for the additional Maker 

Rebates by having any new volume 

(excluding SPY volume) considered as added 

volume. This note 2 incentive will be 

available through September 30, 2024. 

Proposed note 2 provides LMMs and 

MMs two separate paths to receive the 

additional Maker Rebates described 

above. The first path is based on 

liquidity adding volume on BX as a 

percentage of Customer Total 

Consolidated Volume, which is defined 

as the total national volume cleared at 

The Options Clearing Corporation in the 

Customer range in equity and ETF 

options in that month.8 The first path is 

based on a percentage of industry 

volume in recognition of the fact that 

the volume executed by a Member may 

rise or fall with industry volume. 

The second path is a growth incentive 

aimed at rewarding LMMs and MMs to 

grow the extent of their liquidity adding 

activity on the Exchange over time, 

relative to a benchmark month. 

Currently, LMMs and MMs who did not 

have any combined Lead Market Maker 

and Market Maker add liquidity volume 

for the month of March 2024 (and 

therefore lack March 2024 baseline 

volume against which to measure 

subsequent growth) would meet the 

proposed growth requirement through 

whatever volume of LMM and MM add 

liquidity activity (excluding in SPY) 

during the first month of use.9 Growth 

incentives in general are designed to 

further encourage Members to increase 

their order flow to the Exchange, which 

contributes to a deeper, more liquid 

market and provides even more 

execution opportunities for market 

participants. Increased overall order 

flow benefits all market participants by 

contributing towards a robust and wellbalanced market ecosystem. Other 

options exchanges have utilized 

substantially similar growth 

incentives.10 The Exchange notes that it 

excludes LMM and MM liquidity 

adding volume in SPY from both paths 

because SPY is the most actively traded 

symbol on BX, and the Exchange 

believes that LMMs and MMs are 

incentivized to bring SPY liquidity 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 201 / Thursday, October 17, 2024 / Notices 83745 

11See Options 7, Section 2(1), note 1. 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(4) and (5). 

14NetCoalition 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)). 

15Securities Exchange Act Release No. 51808 

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

(‘‘Regulation NMS Adopting Release’’). 

adding volume on BX despite the 

exclusion of SPY volume from the note 

2 qualifications. Further, today, the 

Exchange is encouraging SPY liquidity 

adding volume separately through the 

proposed additional $0.01 per contract 

Maker Rebate in SPY described above. 

Currently, the proposed note 2 

incentives are through September 30, 

2024. The Exchange believes that this 

ensures that the note 2 incentives— 

notably the growth incentive using the 

benchmark month (i.e., March 2024) 

against which LMM and MM growth 

would be measured—are timely and 

meet the intended purpose of 

encouraging increased order flow and 

liquidity adding activity. 

At this time, the Exchange proposes to 

amend note 2 to change the March 2024 

baseline volume against which to 

measure subsequent growth to 

September 2024. Similar to the prior 

note incentive, the Exchange will sunset 

the proposed note 2 incentives after six 

months, in this case April 30, 2025. The 

Exchange believes that the note 2 

incentives will continue to encourage 

Members to send order flow to BX. 

Note 4 Incentive 

The Exchange proposes to amend the 

incentives in note 4 in Options 7, 

Section 2(1) that currently provide: 

Participants that increase their executed 

Customer volume which removes liquidity in 

a given month by at least 70% above their 

March 2024 volume as measured by a 

percentage of TCV will receive a Taker Fee 

discount of $0.05 per contract in Penny 

Symbols excluding AAPL, SPY, QQQ, and 

IWM. Participants with no Customer volume 

in the remove liquidity segment for the 

month of March 2024 may qualify for the 

Taker Fee discount by having any new 

volume considered as added volume. This 

note 4 incentive will be available through 

April 30, 2025. 

Currently, the growth incentives in 

note 4 of Options 7, Section 2(1) have 

similar qualifications as the growth 

incentive in note 2 in that Members are 

measured relative to a benchmark 

month. Specifically, Members that 

increase their executed Customer 

volume which removes liquidity in a 

given month by at least 70% above their 

March 2024 volume as measured by a 

percentage of TCV receive a Taker Fee 

discount of $0.05 per contract in Penny 

Symbols excluding AAPL, SPY, QQQ, 

and IWM. Accordingly, qualifying 

Members are paid a Customer Taker Fee 

of $0.35 (instead of $0.40) per contract 

in Penny Symbols. The Exchange 

excludes AAPL, SPY, QQQ, and IWM 

from the note 4 incentive because 

Members are already paying lower 

Customer Taker Fees of $0.33 per 

contract for those symbols today.11 The 

note 4 incentive Members to grow the 

extent of their Customer liquidity 

removing activity on the Exchange over 

time, relative to a benchmark month. 

Members with no Customer volume in 

the remove liquidity segment for the 

month of March 2024 may qualify for 

the Taker Fee discount by having any 

new volume considered as added 

volume. Similar to the note 2 incentive 

proposed above, Members who did not 

have the requisite volume for the month 

of March 2024 (and therefore lack 

March 2024 baseline volume against 

which to measure subsequent growth) 

would meet the proposed growth 

requirement through whatever volume 

in the required segment during the first 

month of use. The Exchange believes 

that the growth incentive in note 4 

encourages increased Customer order 

flow to the Exchange, which contributes 

to a deeper, more liquid market and 

provides even more execution 

opportunities for market participants. 

Similar to the note 2 incentive above, 

the note 4 incentive sunsets on 

September 30, 2024. 

At this time, the Exchange proposes to 

amend note 4 to change the March 2024 

baseline volume against which to 

measure subsequent growth to 

September 2024. Similar to the prior 

note incentive, the Exchange will sunset 

the proposed note 4 incentives after six 

months, in this case April 30, 2025. The 

Exchange believes that the note 4 

incentives, as amended, would ensure 

that the proposed growth incentive is 

timely and meets the intended purpose 

of encouraging increased order flow and 

Customer liquidity removing activity. 

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,12 in general, and furthers the 

objectives of Sections 6(b)(4) and 6(b)(5) 

of the Act,13 in particular, in that it 

provides for the equitable allocation of 

reasonable dues, fees and other charges 

among members and issuers and other 

persons using any facility, and is not 

designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. 

The Exchange’s proposed changes to 

its schedule of credits are reasonable in 

several respects. As a threshold matter, 

the Exchange is subject to significant 

competitive forces in the market for 

options securities transaction services 

that constrain its pricing determinations 

in that market. The fact that this market 

is competitive has 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 broker-dealers 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’. . . .’’ 14

The Commission and the courts have 

repeatedly expressed their preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. In Regulation NMS, while 

adopting a series of steps to improve the 

current market model, 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.’’ 15

Numerous indicia demonstrate the 

competitive nature of this market. For 

example, clear substitutes to the 

Exchange exist in the market for options 

security transaction services. The 

Exchange is only one of eighteen 

options exchanges to which market 

participants may direct their order flow. 

Within this environment, market 

participants can freely and often do shift 

their order flow among the Exchange 

and competing venues in response to 

changes in their respective pricing 

schedules. As such, the proposal 

represents a reasonable attempt by the 

Exchange to increase its liquidity and 

market share relative to its competitors. 

Note 2 Incentive 

The Exchange believes that the 

amended note 2 incentives are 

reasonable for several reasons. As 

discussed above, note 2 would continue 

to provide LMMs and MMs two separate 

paths to receive the proposed additional 

Maker Rebates of (i) $0.05 per contract 


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83746 Federal Register / Vol. 89, No. 201 / Thursday, October 17, 2024 / Notices 

16Accordingly, qualifying LMMs and MMs would 

receive a total of $0.29 per contract (LMMs) and 

$0.25 per contract (MMs) in Penny Symbols 

excluding SPY. 17Accordingly, qualifying LMMs and MMs would 

receive a total of $0.25 per contract (LMMs) and 

$0.21 per contract (MMs) in SPY. 18Accordingly, qualifying LMMs and MMs would 

receive a total of $0.69 per contract (LMMs) and 

$0.64 per contract (MMs) in Non-Penny Symbols. 19 In particular, LMMs and MMs that execute 

more than 0.45% Customer Total Consolidated 

Volume (‘‘TCV’’) per day which adds liquidity in 

a given month (excluding Lead Market Maker and 

Market Maker volume which adds liquidity in SPY) 

would receive the proposed note 2 incentives. 20See supra note 10. 21See supra note 10. 

22See supra notes 16–18. 23See Options 2, Section 4(j) (setting forth the 

90% or higher quoting obligations for LMMs) and 

Section 5(d) (setting forth the 60% or higher 

quoting obligations for MMs). 

in Penny Symbols excluding SPY,16 (ii) 

$0.01 per contract in SPY,17 and (iii) 

$0.24 per contract in Non-Penny 

Symbols.18 The first path would be 

based on liquidity adding volume on BX 

as a percentage of Customer Total 

Consolidated Volume (i.e., TCV).19 The 

Exchange believes that the total industry 

percentage threshold is reasonable in 

order to align with increasing LMM and 

MM activity on BX over time. The 

Exchange is proposing to base the first 

path on a percentage of industry volume 

in recognition of the fact that the 

volume executed by a Member may rise 

or fall with industry volume. A 

percentage of industry volume 

calculation allows the proposed 

qualifications in note 2 to be calibrated 

to current market volumes rather than 

requiring a static amount of volume 

regardless of market conditions. The 

proposed threshold of 0.45% Customer 

Total Consolidated Volume is generally 

intended to reward LMMs and MMs for 

executing more liquidity adding volume 

on BX. To the extent such activity is 

increased by this proposal, market 

participants may increasingly compete 

for the opportunity to trade on Exchange 

to the benefit of all market participants. 

As noted above, total industry 

percentage thresholds are established 

concepts within the Pricing Schedules 

of BX’s affiliates.20

As discussed above, the second path 

would continue to be a growth incentive 

that would provide LMMs and MMs 

with the additional Maker Rebates 

outlined above if they increase their 

combined LMM and MM volume which 

adds liquidity in a given month by at 

least 70% above their September 2024 

volume as measured by a percentage of 

TCV (excluding LMM and MM volume 

which adds liquidity in SPY). The 

Exchange believes that its proposal is 

reasonable because it will provide extra 

incentives to LMMs and MMs to engage 

in substantial amounts of liquidity 

adding activity on the Exchange, as well 

as to substantially grow the extent to 

which they do so relative to a recent 

benchmark month. The Exchange 

believes that if the proposed growth 

incentive is effective, any ensuing 

increase in liquidity adding activity on 

BX will improve the quality of the 

market overall, to the benefit of all 

market participants. The Exchange also 

believes that it is reasonable to consider 

any new add liquidity volume 

(excluding SPY volume) for LMMs and 

MMs with no such volume for the 

month of September 2024 in order for 

those market participants to receive the 

proposed additional Maker Rebates in 

note 2. The proposed growth incentive 

is designed to attract additional 

liquidity from new LMMs and MMs as 

well as existing LMMs and MMs who 

may not have a large footprint on BX 

today. To the extent this proposal 

attracts such LMM and MM add 

liquidity volume to BX, all market 

participants should benefit through 

more trading opportunities and tighter 

spreads. An overall increase in activity 

would deepen the Exchange’s liquidity 

pool, support the quality of price 

discovery, promote market transparency 

and improve market quality for all 

investors. As discussed above, the 

Exchange intends for the proposed note 

2 incentives, including the growth 

incentive, to sunset on April 30, 2025, 

and will use this time to evaluate 

suitable parameters for such market 

participants in the targeted segment. 

The Exchange believes that this will 

ensure that the proposed incentives are 

timely and meet the intended purpose 

of encouraging increased order flow and 

liquidity adding activity. As noted 

above, other options exchanges 

(including the Exchange’s affiliate) have 

previously adopted substantially similar 

growth incentives.21

The Exchange further believes that it 

is reasonable to exclude LMM and MM 

liquidity adding volume in SPY from 

both paths because SPY is the most 

actively traded symbol on BX, and 

Exchange believes that LMMs and MMs 

will continue to be incentivized to bring 

SPY liquidity adding volume on BX 

despite the exclusion of SPY volume 

from the note 2 qualifications. Further, 

the Exchange is encouraging SPY 

liquidity adding volume separately 

through the proposed additional $0.01 

per contract Maker Rebate in SPY 

described above. 

The Exchange believes that the 

proposed note 2 incentives are equitable 

and not unfairly discriminatory for the 

reasons that follow. As a general matter, 

the Exchange believes that it is equitable 

and not unfairly discriminatory to 

provide the note 2 incentives to only 

LMMs and MMs because these market 

participants have different requirements 

and additional obligations to the 

Exchange that other market participants 

do not (such as quoting requirements). 

As noted above, LMMs would 

ultimately receive higher Maker Rebates 

than MMs when combining the current 

base rebates with the proposed 

additional rebates.22 Nevertheless, the 

Exchange continues to believe that it is 

equitable and not unfairly 

discriminatory to provide more 

favorable pricing to LMMs compared to 

MMs given that LMMs are subject to 

heightened quoting obligations 

compared to Market Makers.23 The 

higher rebates therefore recognize the 

differing contributions made to the 

liquidity and trading environment on 

the Exchange by LMMs. Overall, the 

Exchange believes that incentivizing 

both LMMs and MMs to provide greater 

liquidity benefits all market participants 

through the quality of order interaction. 

The Exchange also believes that it is 

equitable and not unfairly 

discriminatory to consider any new add 

liquidity volume (excluding SPY 

volume) for LMMs and MMs with no 

such volume in September 2024 in 

order for those market participants to 

receive the proposed additional Maker 

Rebates because this is designed to 

attract additional liquidity and order 

flow from new and existing LMMs and 

MMs to the Exchange, as discussed 

above. In turn, this additional liquidity 

should benefit all market participants 

through increased liquidity and order 

interaction. Furthermore, the proposed 

growth incentive will be temporary and 

sunset on April 30, 2025, to ensure that 

the incentive is timely and meets the 

intended purpose of encouraging 

increased order flow and liquidity 

adding activity. 

Note 4 Incentive 

The Exchange believes that the 

proposed growth incentive in new note 

4 of Options 7, Section 2(1) is 

reasonable for the reasons that follow. 

As discussed above, Members that 

increase their executed Customer 

volume which removes liquidity in a 

given month by at least 70% above their 

September 2024 volume as measured by 

a percentage of TCV will receive a Taker 

Fee discount of $0.05 per contract in 

Penny Symbols excluding AAPL, SPY, 

QQQ, and IWM. Accordingly, qualifying 

Members would pay a Customer Taker 

Fee of $0.35 (instead of $0.40) per 

contract in Penny Symbols excluding 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 201 / Thursday, October 17, 2024 / Notices 83747 

24See Options 7, Section 2(1), note 1. 

25See supra note 10. 26 15 U.S.C. 78s(b)(3)(A)(ii). 

AAPL, SPY, QQQ, and IWM. The 

Exchange believes it is reasonable to 

exclude AAPL, SPY, QQQ, and IWM 

from the note 4 incentive because 

Members are already paying lower 

Customer Taker Fees of $0.33 per 

contract for those symbols today.24

The Exchange believes that the 

proposed growth incentive is reasonable 

because it will provide extra incentives 

to Members to engage in substantial 

amounts of Customer liquidity removing 

activity on the Exchange, as well as to 

substantially grow the extent to which 

they do so relative to a recent 

benchmark month. The Exchange 

believes that if the proposed growth 

incentive is effective, any ensuing 

increase in liquidity removing activity 

on BX will increase trading 

opportunities for all market 

participants. The Exchange also believes 

that it is reasonable to consider any new 

Customer remove liquidity volume for 

Members with no such volume for the 

month of September 2024 in order for 

those Members to receive the proposed 

Taker Fee discount in note 4. The 

proposed growth incentive is designed 

to attract additional Customer order 

flow from new Members as well as 

existing Members who may not have a 

large footprint on BX today. To the 

extent this proposal attracts such order 

flow to BX, all market participants 

should benefit through more trading 

opportunities. As discussed above, the 

Exchange intends for the proposed 

growth incentive in note 4 to sunset on 

April 30, 2025, and will use this time to 

evaluate suitable parameters for such 

market participants in the targeted 

segment. The Exchange believes that 

this will ensure that the proposed 

incentive is timely and meets the 

intended purpose of encouraging 

increased order flow and Customer 

liquidity removing activity. As noted 

above, other options exchanges 

(including the Exchange’s affiliate) have 

previously adopted similar growth 

incentives.25

Further, the Exchange believes that 

the proposed note 4 incentive is 

equitable and not unfairly 

discriminatory for the reasons that 

follow. As a general matter, the 

Exchange believes that it is equitable 

and not unfairly discriminatory to 

provide the note 4 incentive to only 

Customer orders because the proposed 

changes are intended to increase 

Customer order follow, particularly 

Customer remove liquidity order flow, 

to BX. An increase in Customer order 

flow enhances liquidity on the 

Exchange to the benefit of all market 

participants by providing more trading 

opportunities, which in turn attracts 

other market participants that may 

interact with this order flow. 

The Exchange also believes that it is 

equitable and not unfairly 

discriminatory to consider any new 

Customer remove liquidity volume for 

Members with no such volume in 

September 2024 in order for those 

Members to receive the proposed Taker 

Fee discount because this is designed to 

attract additional liquidity and order 

flow from new and existing Members to 

the Exchange, as discussed above. In 

turn, this additional liquidity should 

benefit all market participants through 

increased liquidity and order 

interaction. Furthermore, the proposed 

growth incentive will be temporary and 

sunset on April 30, 2025, to ensure that 

the incentive is timely and meets the 

intended purpose of encouraging 

increased Customer order flow and 

liquidity removing activity. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

In terms of intra-market competition, 

the Exchange does not believe that its 

proposal will place any category of 

market participant at a competitive 

disadvantage. As it relates to the 

proposed note 2 incentives offered to 

LMMs and MMs, the Exchange believes 

that the additional Maker Rebates 

should encourage the provision of 

liquidity from both existing and new 

LMMs and MMs that enhances the 

quality of the Exchange’s market and 

increases the number of trading 

opportunities on the Exchange for all 

market participants who will be able to 

compete for such opportunities. 

Similarly, for the proposed note 4 

incentive offered to Customers, the 

Exchange likewise believes that the 

Taker Fee discount should encourage 

additional Customer order flow from 

both existing and new Members, which 

would enhance BX’s market quality and 

increase trading opportunities to the 

benefit of all market participants. 

In terms of inter-market competition, 

the Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

options exchanges. Because competitors 

are free to modify their own fees in 

response, and because market 

participants may readily adjust their 

order routing practices, the Exchange 

believes that the degree to which fee 

changes in this market may impose any 

burden on competition is extremely 

limited. In sum, if the changes proposed 

herein are unattractive to market 

participants, it is likely that the 

Exchange will lose market share as a 

result. Accordingly, the Exchange does 

not believe that the proposed changes 

will impair the ability of members or 

competing order execution venues to 

maintain their competitive standing in 

the financial markets. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Act.26

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is: (i) necessary or appropriate in 

the public interest; (ii) for the protection 

of investors; or (iii) otherwise in 

furtherance of the purposes of the Act. 

If the Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

BX–2024–038 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 


ddrumheller on DSK120RN23PROD with NOTICES1
83748 Federal Register / Vol. 89, No. 201 / Thursday, October 17, 2024 / Notices 

27 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–BX–2024–038. 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–BX–2024–038 and should be 

submitted on or before November 7, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.27

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–23900 Filed 10–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

35358; File No. 813–00403] 

Edgar Street Capital, LLC, Elizabeth 

Street Capital, LLC and Jane Street 

Group, LLC 

October 11, 2024. 

AGENCY: Securities and Exchange 

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

ACTION: Notice. 

Notice of application for an order 

under sections 6(b) and 6(e) of the 

Investment Company Act of 1940 (the 

‘‘Act’’) granting an exemption from all 

provisions of the Act, except sections 9, 

17, 30, 36 through 53 and the rules and 

regulations under the Act. With respect 

to sections 17(a), (d), (e), (f), (g) and (j) 

of the Act, sections 30(a), (b), (e), and (h) 

of the Act and the Rules and 

Regulations and rule 38a–1 under the 

Act, Applicants (as defined below) 

request a limited exemption as set forth 

in the application. 

SUMMARY OF APPLICATION: The requested 

exemption would permit Applicants to 

enter an order to exempt certain limited 

liability companies, partnerships, 

business trusts, or other entities 

(‘‘Funds’’) formed for the benefit of 

eligible employees of Jane Street Group, 

LLC and its affiliates from certain 

provisions of the Act. Each Fund will be 

an ‘‘employees’ securities company’’ 

within the meaning of section 2(a)(13) of 

the Act. 

APPLICANTS: Jane Street Group, LLC; 

Edgar Street Capital, LLC and Elizabeth 

Street Capital, LLC. 

FILING DATES: The application was filed 

on December 28, 2021, and amended on 

June 13, 2022, October 19, 2022, March 

30, 2023, and July 17, 2024. 

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 Commission’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 November 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 at 

Secretarys-Office@sec.gov. 

ADDRESSES: 

The Commission: Secretarys-Office@

sec.gov. 

Applicants: James Dieterich, Jane 

Street Group, LLC: 250 Vesey Street, 

New York, NY 10281; John J. Mahon, 

Esq., Proskauer Rose LLP: 1001 

Pennsylvania Avenue, Suite 600, 

Washington, DC 20004. 

FOR FURTHER INFORMATION CONTACT: 

Toyin Momoh, Senior Counsel, or Lisa 

Reid Ragen, Branch Chief, at (202) 551– 

5325 (Division of Investment 

Management, Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: For 

Applicants’ representations, legal 

analysis, and conditions, please refer to 

Applicants’ fourth amended and 

restated application, dated July 17, 

2024, 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. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–23980 Filed 10–16–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101304; File No. SR– 

CboeEDGA–2024–039] 

Self-Regulatory Organizations; Cboe 

EDGA Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fees Schedule Regarding Dedicated 

Cores 

October 10, 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 

September 30, 2024, Cboe EDGA 

Exchange, Inc. (the ‘‘Exchange’’ or 

‘‘EDGA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’) 

the proposed rule change as described 

in Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 


ddrumheller on DSK120RN23PROD with NOTICES1