[Federal Register Volume 89, Number 208 (Monday, October 28, 2024)]
[Notices]
[Pages 85574-85576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-24940]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-101406; File No. SR-CboeBZX-2024-097]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Company Listing Fees in BZX Rule 14.13

October 22, 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 October 9, 2024, Cboe BZX Exchange, Inc. (``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I and II below, which Items have been 
prepared by the Exchange. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to amend the fees applicable to securities 
listed on the Exchange, which are set forth in BZX Rule 14.13, Company 
Listing Fees. 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
    On January 1, 2019, the Exchange adopted an entry fee for exchange-
traded products (``ETPs'') \3\ that are not ``Generically-Listed 
ETPs''.\4\ The entry fee adopted in the Original Entry Fee Filing 
imposed a maximum entry fee on an issuer basis of $22,500 per calendar 
year. Now, the Exchange proposes to eliminate the yearly $22,500 
maximum entry fee (the ``entry fee cap'') applied to issuers. The 
Exchange also proposes to amend Rule 14.13 in order to adopt a separate 
fee of $3,500 per ETP for Companies \5\ that make a change to a product 
already approved for listing and trading on the Exchange that requires 
a proposed rule change pursuant to Section 19(b) of the Exchange Act 
(an ``Exchange Rule Filing Amendment'').\6\
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    \3\ As defined in Rule 11.8(e)(1)(A), the term ``ETP'' means any 
security listed pursuant to Exchange Rule 14.11.
    \4\ ``Generically-Listed ETPs'' refers to all ETPs, with the 
exception of Index Fund Shares, Portfolio Depositary Receipts, 
Managed Fund Shares, Linked Securities, Currency Trust Shares, and 
Exchange-Traded Fund Shares that are listed on the Exchange pursuant 
to Rule 19b-4(e) under the Exchange Act and for which a proposed 
rule change pursuant to Section 19(b) of the Exchange Act is not 
required to be filed with the Commission. See Exchange Rule 
14.13(b)(1)(B)(v)(a). See Securities Exchange Act No. 83597 (July 5, 
2018) 83 FR 32164 (July 11, 2018) (SR-CboeBZX-2018-046) (the 
``Original Entry Fee Filing'').
    \5\ See Exchange Rule 14.1(a)(3).
    \6\ The Exchange initially filed the proposed fee change on 
September 12, 2024 (SR-CboeBZX-2024-086). On September 19, 2024, the 
Exchange withdrew that filing and submitted SR-CboeBZX-2024-090. On 
September 30, 2024, the Exchange withdrew that filing and submitted 
SR-CboeBZX-2024-095. On October 9, 2024, the Exchange withdrew that 
filing and submitted this proposal.

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[[Page 85575]]

Entry Fee Cap
    Rule 14.13(b)(1)(B)(v) sets forth the entry fees applicable to 
ETPs, which charge an entry fee of $7,500 per ETP that is not a 
Generically-Listed ETP. Specifically, ETPs that are not Generically-
Listed ETPs require an Exchange Rule Filing \7\ to list and trade the 
ETP on the Exchange, and thus require significantly more time and 
Exchange resources to bring to market than Generically-Listed ETPs. 
Rule 14.13(b)(1)(B)(v)(a)(2) also provides that each issuer will be 
subject to an aggregate maximum entry fee of $22,500 per calendar year. 
Therefore, an issuer is only required to pay an entry fee for a maximum 
of three new ETPs that are not Generically Listed ETPs per year.
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    \7\ An initial Exchange Rule Filing refers to the proposed rule 
change filed pursuant to Section 19(b) of the Exchange Act required 
to initially list and trade an ETP on the Exchange. See Exchange 
Rule 14.13(b)(1)(B)(v)(a).
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    Now, the Exchange proposes to eliminate the yearly $22,500 entry 
fee cap applied to ETP issuers. The Exchange believes that eliminating 
the entry fee cap would address the costs associated with preparing 
more than three Exchange Rule Filings for an issuer on an annual basis.
    The Exchange also proposes to combine the text of existing Exchange 
Rule 14.13(b)(1)(B)(v)(a)(1) and Exchange Rule 14.13(b)(1)(B)(v)(a) and 
to correspondingly delete the (1) from the Rulebook.
Exchange Rule Filing Amendment Fee
    The Exchange also proposes to adopt Rule 14.13(b)(4) which would 
provide for an Exchange Rule Filing Amendment fee of $3,500 per ETP. 
The proposed Exchange Rule Filing Amendment fee would apply to a 
Company that makes a change to a product already approved for listing 
and trading on the Exchange that would require the Exchange to prepare 
an Exchange Rule Filing Amendment. In general, any change that requires 
a new or amended representation from the initial Exchange Rule Filing 
would require an Exchange Rule Filing Amendment. Such a fee would be 
used to address the costs associated with preparing and submitting an 
Exchange Rule Filing Amendment when Companies make a change that would 
require such an amendment. The Exchange notes that Companies making 
multiple changes that are addressed in the same Exchange Rule Filing 
Amendment would only be charged $3,500 total and would not be charged 
for each individual change in the Exchange Rule Filing Amendment.\8\ 
The Exchange will charge for each Exchange Rule Filing Amendment unless 
it is in furtherance of the same continuous effort. Specifically, 
similar to existing Rule 14.13(b)(1)(B)(v)(a)(1), proposed Rule 
14.13(b)(4) would provide that an Exchange Rule Filing Amendment will 
be considered in furtherance of the same continuous effort if: the 
Exchange Rule Filing Amendment is required for ministerial purposes 
related to another previously filed Exchange Rule Filing Amendment,\9\ 
or if the Exchange Rule Filing Amendment is withdrawn and refiled 
within 30 calendar days.\10\
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    \8\ An Exchange Rule Filing Amendment that modified 
representations across multiple ETPs in the same Exchange Rule 
Filing Amendment would be charged the fee for each individual ETP.
    \9\ Specifically, the Exchange would not assess an additional 
fee to an ETP in the event that an Exchange Rule Filing Amendment 
was submitted to the Commission, rejected by the Commission, and 
shortly thereafter resubmitted. Instances where Exchange Rule Filing 
Amendments are either rejected or withdrawn and refiled shortly 
thereafter often involve minor or ministerial errors that are in 
furtherance of the same continuous effort.
    \10\ The proposed fee would not be applicable to an amendment to 
an open Exchange Rule Filing Amendment. For example, assume the 
Exchange has already made an Exchange Rule Filing Amendment to amend 
a representation in the initial filing to list and trade the ETP. If 
another Exchange Rule Filing Amendment (e.g., amendment no. 2 to the 
previously filed Exchange Rule Filing Amendment) is necessary, the 
Exchange would not charge an additional Exchange Rule Filing 
Amendment fee. As another example, if a partial amendment no. 3 is 
needed to that Exchange Rule Filing Amendment, the Exchange would 
not charge an additional Exchange Rule Filing Amendment Fee for that 
partial amendment. Stated differently, the proposed fee would not be 
applicable to an amendment to an open Exchange Rule Filing 
Amendment.
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    The Exchange proposes to implement the proposed fees effective 
September 10, 2024.
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.\11\ Additionally, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \12\ 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) \13\ 
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.
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    \11\ 15 U.S.C. 78f(b).
    \12\ Id.
    \13\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that proposed Rules 14.13(b)(1)(B)(v)(a) and 
14.13(b)(4), which are both designed to address the Exchange's costs in 
preparing and filing Exchange Rule Filings and Exchange Rule Filing 
Amendments, are reasonable, fair and equitable, and not an unfairly 
discriminatory allocation of fees and other charges because they would 
apply equally to all Companies. Specifically, the Exchange's proposal 
to eliminate the entry fee cap for ETPs would only impact Companies 
that require more than three Exchange Rule Filings in a given calendar 
year. As each Exchange Rule Filing requires significant Exchange 
resources on an individual basis, and because there is no reduced cost 
to the Exchange for preparing multiple Exchange Rule Filings for a 
single Company, the Exchange believes it reasonable to address the 
Exchange's cost in preparing such Exchange Rule Filings even if they 
exceed three in a given year for a given Company. The Exchange also 
believes its proposal to adopt an Exchange Rule Filing Amendment fee is 
reasonable given the additional resources required by the Exchange in 
connection with ETPs requiring an Exchange Rule Filing Amendment 
pursuant to Section 19(b), specifically the significant additional time 
and extensive legal and business resources required by Exchange staff 
to prepare and review such filings and to communicate with issuers and 
the Commission regarding such filings.
    The Exchange believes the technical change to combine Rule 
14.13(b)(1)(B)(v)(a) and Rule 14.13(b)(1)(B)(v)(a)(1) is consistent 
with Section 6(b)(1) \14\ because it will allow Members of the Exchange 
to more easily interpret Exchange Rules.
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    \14\ 15 U.S.C. 78f(b)(1).
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    Furthermore, the marketplace for listings is extremely competitive 
and there are several other national securities exchanges that offer 
ETP listings. Transfers between listing venues occur frequently for 
numerous reasons, including listing fees. The proposed rule change 
reflects a competitive pricing structure, which the Exchange believes 
will enhance competition both among ETP issuers and listing venues, to 
the benefit of investors.
    Based on the foregoing, the Exchange believes that the proposed 
rule changes are consistent with the Act.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition not necessary or appropriate in 
furtherance

[[Page 85576]]

of the purposes of the Act. With respect to the proposal to eliminate 
the entry fee cap for ETPs and adopt a new fee for each Exchange Rule 
Filing Amendment, the Exchange does not believe that the changes burden 
competition, but instead, enhance competition, as they are intended to 
address the costs associated with preparing an Exchange Rule Filing and 
Exchange Rule Filing Amendment when Companies require such filings. As 
such, the proposal is a competitive proposal designed to enhance 
pricing competition among listing venues and implement pricing for such 
rule filings that better reflects expenses associated with listing ETPs 
on the Exchange. The Exchange does not believe the proposed amendment 
would burden intramarket competition as the proposed fee would be 
assessed to all issuers uniformly that require more than three Exchange 
Rule Filings in a given year or an Exchange Rule Filing Amendment.

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 \15\ and paragraph (f) of Rule 19b-4 \16\ 
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.
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 17 CFR 240.19b-4(f).
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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

    <bullet> Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
    <bullet> Send an email to <a href="/cdn-cgi/l/email-protection#0b797e676e26686466666e657f784b786e68256c647d"><span class="__cf_email__" data-cfemail="c2b0b7aea7efa1adafafa7acb6b182b1a7a1eca5adb4">[email protected]</span></a>. Please include 
file number SR-CboeBZX-2024-097 on the subject line.

Paper Comments

    <bullet> 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-2024-097. 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-2024-097 and should 
be submitted on or before November 18, 2024.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-24940 Filed 10-25-24; 8:45 am]
BILLING CODE 8011-01-P


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