Federal Register / Vol. 89, No. 205 / Wednesday, October 23, 2024 / Notices 84657 

55 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

change on October 1, 2024 (SR–CboeEDGX–2024– 

062). On October 9, 2024, the Exchange withdrew 

that filing and submitted this filing. 

4See Cboe Global Markets, U.S. Equities Market 

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

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

equities/market_statistics/. 

5See EDGX Equities Fee Schedule, Standard 

Rates. 

6 Id. 

7Fee code BB is appended to orders that remove 

liquidity from EDGX (Tape B). 

8Fee code N is appended to orders that remove 

liquidity from EDGX (Tape C). 

9Fee code W is appended to orders that remove 

liquidity from EDGX (Tape A). 

10ADAV means average daily added volume 

calculated as the number of shares added per day. 

ADAV is calculated on a monthly basis. 

11TCV 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. The Exchange excludes from its 

calculation of TCV volume on any day that the 

Exchange experiences an Exchange System 

Disruption, on any day with a scheduled early 

market close, and the Russell Reconstitution Day. 

12ADV means average daily volume calculated as 

the number of shares added to, removed from, or 

routed by, the Exchange, or any combination or 

Continued 

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–SAPPHIRE–2024–31 and should be 

submitted on or before November 13, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.55

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–24472 Filed 10–22–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101377; File No. SR– 

CboeEDGX–2024–063] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend 

Remove Volume Tier 2 of the Fee 

Schedule 

October 17, 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 EDGX Exchange, Inc. 

(‘‘Exchange’’ or ‘‘EDGX’’) 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 EDGX Exchange, Inc. (‘‘EDGX’’ 

or the ‘‘Exchange’’) is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’ or ‘‘SEC’’) a proposed 

rule change 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/ 

options/regulation/rule_filings/edgx/), 

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 (‘‘EDGX Equities’’) by 

changing the required criteria applicable 

to Remove Volume Tier 2.3 The 

Exchange proposes to implement these 

changes effective October 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 Act, to which 

market participants may direct their 

order flow. Based on publicly available 

information,4 no single registered 

equities exchange has more than 16% of 

the market share. Thus, in such a lowconcentrated 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.5 For 

orders in securities priced below $1.00, 

the Exchange provides a standard rebate 

of $0.00003 per share for orders that add 

liquidity and assesses a fee of 0.30% of 

the total dollar value for orders that 

remove liquidity.6 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. 

Under footnote 1 of the Fee Schedule, 

the Exchange currently offers various 

Add/Remove Volume Tiers. In 

particular, the Exchange offers two 

Remove Volume Tiers that each assess 

a reduced fee for Members’ qualifying 

orders yielding fee codes BB,7 N,8 and 

W9 where a Member reaches certain 

add volume-based criteria. The 

Exchange now proposes to amend the 

criteria of Remove Volume Tier 2. 

Currently, the criteria for Remove 

Volume Tier 2 is as follows: 

• Remove Volume Tier 2 provides a 

reduced fee of $0.00285 per share for 

securities priced at or above $1.00 to 

qualifying orders (i.e., orders yielding 

fee codes BB, N, or W) and a reduced 

fee of 0.28% of total dollar value for 

securities priced below $1.00 where: (1) 

Member has an ADAV 10 of greater than 

or equal to 0.30% of the TCV; 11 (2) 

Member has a total remove ADV 12


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84658 Federal Register / Vol. 89, No. 205 / Wednesday, October 23, 2024 / Notices 

subset thereof, per day. ADV is calculated on a 

monthly basis. 

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

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

15 Id. 

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

17See e.g., MIAX Pearl Equities Exchange Fee 

Schedule, Remove Volume Tier, available at MIAX_

Pearl_Equities_Fee_Schedule_12012023.pdf 

(miaxglobal.com); MEMX Equities Fee Schedule, 

Liquidity Removal Tier, available at MEMX Equities 

Fee Schedule—MEMX Exchanges 

(memxtrading.com). 

18See e.g., BZX Equities Fee Schedule, Footnote 

1, Add/Remove Volume Tiers. 

19See e.g., EDGX Equities Fee Schedule, Footnote 

1, Add/Remove Volume Tiers. 

greater than or equal to 0.40% of the 

TCV; and (3) Member adds a Retail Pre 

Market Order ADV (i.e., yielding fee 

code ZO) greater than or equal to 3 

million shares. 

Now, the Exchange proposes to 

amend the second and third prongs of 

the criteria in Remove Volume Tier 2 by 

adding alternative criteria to prong 2 

and reducing the Retail Pre Market 

Order ADV requirement to prong 3. The 

proposed criteria is as follows: 

• Proposed Remove Volume Tier 2 

provides a reduced fee of $0.00285 per 

share for securities priced at or above 

$1.00 to qualifying orders (i.e., orders 

yielding fee codes BB, N, or W) and a 

reduced fee of 0.28% of total dollar 

value for securities priced below $1.00 

where: (1) Member has an ADAV of 

greater than or equal to 0.30% of the 

TCV; (2) Member has a total remove 

ADV greater than or equal to 0.40% of 

the TCV or Member has a total remove 

ADV greater than or equal to 40 million 

shares; and (3) Member adds a Retail Pre 

Market Order ADV (i.e., yielding fee 

code ZO) greater than or equal to 1.5 

million shares. 

The proposed amendment to Remove 

Volume Tier 2 is intended to slightly 

decrease the difficulty of achieving an 

existing opportunity to earn a reduced 

fee by providing an alternative for 

Members to increase their order flow to 

the Exchange (as provided under 

proposed prong 2) and reducing the 

volume requirement provided under 

proposed prong 3. Submitting increased 

order flow to the Exchange will further 

contribute to a deeper, more liquid 

market and provide even more 

execution opportunities for active 

market participants. Incentivizing an 

increase in liquidity removing volume, 

through reduced fee opportunities, 

encourages liquidity removing Members 

on the Exchange to increase transactions 

and take execution opportunities, and 

liquidity adding Members to contribute 

to a deeper, more liquid market, on the 

Exchange, together providing for overall 

enhanced price discovery and price 

improvement opportunities on the 

Exchange. As such, increased overall 

order flow benefits all Members by 

contributing towards a robust and wellbalanced market ecosystem. 

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.13 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 14 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 15 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers as 

well as Section 6(b)(4) 16 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 

remove [sic] Retail [sic] Volume Tier 2 

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. 

Specifically, the Exchange’s proposed 

criteria for Remove Volume Tier 2 is not 

a significant departure from existing 

criteria, continues to be reasonably 

correlated to the reduced fee offered by 

the Exchange and other competing 

exchanges,17 and will continue to 

incentivize Members to submit order 

flow to the Exchange. Additionally, the 

Exchange notes that relative volumebased incentives and discounts have 

been widely adopted by exchanges,18

including the Exchange,19 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 of 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. 

The Exchange further believes the 

proposed modifications to Remove 

Volume Tier 2 will provide a reasonable 

means to encourage liquidity removing 

orders in Members’ order flow to the 

Exchange and to incentivize Members to 

continue to provide liquidity removing 

volume to the Exchange by offering 

them an opportunity to receive a 

reduced fee on qualifying orders. Not 

only is the proposed criteria in 

proposed Remove Volume Tier 2 

slightly less difficult than the current 

criteria found in that tier, the proposed 

criteria is not a significant departure 

from existing criteria, is reasonably 

correlated to the reduced fee offered by 

the Exchange, and will continue to 

incentivize Members to submit order 

flow to the Exchange. An overall 

increase in activity would deepen the 

Exchange’s liquidity pool, offers 

additional cost savings, support the 

quality of price discovery, promote 

market transparency and improve 

market quality, for all investors. 

The Exchange believes that the 

proposal represents an equitable 

allocation of fees and rebates and is not 

unfairly discriminatory because all 

Members will be eligible for the 

proposed revised tier and have the 

opportunity to meet the revised tier’s 

criteria and receive the corresponding 

reduced fee 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 the new proposed tiers. 

While the Exchange has no way of 

predicting with certainty how the 

proposed changes will impact Member 

activity, based on the prior months 

volume, the Exchange anticipates that at 

least one Member will be able to satisfy 

proposed Remove Volume Tier 2. The 


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Federal Register / Vol. 89, No. 205 / Wednesday, October 23, 2024 / Notices 84659 

20Supra note 3. 

21See Securities Exchange Act Release No. 51808 

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

22NetCoalition 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) (SRNYSEArca–2006–21)). 

23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4(f). 

Exchange also notes that proposed 

changes will not adversely impact any 

Member’s ability to qualify for reduced 

fees offered under other tiers. Should a 

Member not meet the proposed new 

criteria, the Member will merely not 

receive that corresponding reduced fee. 

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 changes 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 changes to the Remove 

Volume Tier 2 will apply to all 

Members equally in that all Members 

are eligible for the proposed revised tier, 

have a reasonable opportunity to meet 

the proposed tier’s criteria and will 

receive the reduced fee on their 

qualifying orders if such criteria is met. 

The Exchange does not believe the 

proposed changes burden competition, 

but rather, enhances competition as they 

are intended to increase the 

competitiveness of EDGX by amending 

an existing pricing incentive 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. 

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 16% of the market share.20

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.’’ 21 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’ . . .’’.22 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 23 and paragraph (f) of Rule 

19b–4 24 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– 

CboeEDGX–2024–063 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–CboeEDGX–2024–063. 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 


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84660 Federal Register / Vol. 89, No. 205 / Wednesday, October 23, 2024 / Notices 

25 17 CFR 200.30–3(a)(12). 

1See Securities Exchange Act Release No. 34– 

90610 (December 9, 2020), 86 FR 18596 (April 9, 

2021) (File No. S7–03–20) (‘‘Infrastructure Adopting 

Release’’). 

2Some of these respondents were estimated to 

incur no, or only part of, the estimated initial 

burdens because they were already subject to 

Regulation SCI (i.e., as plan processors, SROs or 

affiliates of SROs). 

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–CboeEDGX–2024–063 and should be 

submitted on or before November 13, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–24471 Filed 10–22–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–653, OMB Control No. 

3235–0703] 

Proposed Collection; Comment 

Request; Extension: Regulation SCI, 

Form SCI 

Upon Written Request, Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736. 

Notice is hereby given that pursuant 

to the Paperwork Reduction Act of 1995 

(‘‘PRA’’) (44 U.S.C. 3501 et seq.), the 

Securities and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

provided for in Regulation Systems 

Compliance and Integrity (‘‘Regulation 

SCI’’) (17 CFR 242.1000–1007) and 

Form SCI (17 CFR 249.1900) under the 

Securities Exchange Act of 1934 

(‘‘Exchange Act’’) (15 U.S.C. 78a et seq.). 

The Commission plans to submit this 

existing collection of information to the 

Office of Management and Budget 

(‘‘OMB’’) for extension and approval. 

Regulation SCI requires certain key 

market participants to, among other 

things: (1) have comprehensive policies 

and procedures in place to help ensure 

the robustness and resiliency of their 

technological systems, and also that 

their technological systems operate in 

compliance with the federal securities 

laws and with their own rules; and (2) 

provide certain notices and reports to 

the Commission to improve 

Commission oversight of securities 

market infrastructure. 

Regulation SCI advances the goals of 

the national market system by 

enhancing the capacity, integrity, 

resiliency, availability, and security of 

the automated systems of entities 

important to the functioning of the U.S. 

securities markets, as well as reinforcing 

the requirement that such systems 

operate in compliance with the 

Exchange Act and rules and regulations 

thereunder, thus strengthening the 

infrastructure of the U.S. securities 

markets and improving its resilience 

when technological issues arise. In this 

respect, Regulation SCI establishes an 

updated and formalized regulatory 

framework, thereby helping to ensure 

more effective Commission oversight of 

such systems. 

Respondents consist of national 

securities exchanges and associations, 

registered clearing agencies, exempt 

clearing agencies, plan processors, and 

alternative trading systems. There are 

currently 48 respondents, and the 

Commission staff estimates that, on 

average, 2 new respondents may become 

SCI entities each year, 1 of which would 

be a self-regulatory organization 

(‘‘SRO’’). Accordingly, Commission staff 

estimates that over the next three years 

there will be an average of 50 

respondents per year. 

In addition, in December 2020, the 

Commission adopted amendments to 

Regulation SCI in connection with 

updates to the national market system 

for the collection, consolidation, and 

dissemination of information with 

respect to quotations for and 

transactions in national market system 

(‘‘NMS’’) stocks (‘‘Infrastructure 

Amendments’’). Specifically, the 

Commission adopted a definition of 

‘‘SCI competing consolidator’’ that will 

subject competing consolidators to 

Regulation SCI, after a transition period, 

if they are above a specified 

consolidated market data gross revenue 

threshold.1 The Infrastructure 

Amendments increased the number of 

respondents to the collections of 

information in Regulation SCI, and the 

Commission estimates that seven 

competing consolidators will meet this 

definition and be subject to the 

requirements of Regulation SCI.2

Rule 1001(a) requires each SCI entity 

to establish, maintain, and enforce 

written policies and procedures 

reasonably designed to ensure that its 

SCI systems and, for purposes of 

security standards, indirect SCI systems, 

have levels of capacity, integrity, 

resiliency, availability, and security, 

adequate to maintain the SCI entity’s 

operational capability and promote the 

maintenance of fair and orderly markets. 

The Commission staff estimates that the 

total annual initial recordkeeping 

burden for 7 new respondents will be 

4,511 hours, and the annual ongoing 

recordkeeping burden for all 55 

respondents will be, on average, 12,760 

hours. The Commission staff estimates 

that the 7 new respondents would incur, 

on average, an annual initial internal 

cost of compliance of $1,696,578, as 

well as outside legal or consulting costs 

of $305,500. In addition, all respondents 

will incur, on average, an estimated 

ongoing annual internal cost of 

compliance of $4,801,060. 

Rule 1001(b) requires each SCI entity 

to establish, maintain, and enforce 

written policies and procedures 

reasonably designed to ensure that its 

SCI systems operate in a manner that 

complies with the Exchange Act and the 

rules and regulations thereunder and 

the entity’s rules and governing 

documents, as applicable. The 

Commission staff estimates that the total 

annual initial recordkeeping burden for 

7 new respondents will be 1,755 hours, 

and the annual ongoing recordkeeping 

burden for all respondents will be, on 

average, 8,105 hours. The Commission 

staff estimates that the 7 new 

respondents would incur an initial 

internal cost of compliance of $628,160, 

as well as outside legal or consulting 

costs of $175,500. In addition, all 

respondents will incur, on average, an 

estimated ongoing annual internal cost 

of compliance of $2,881,660. 

Rule 1001(c) requires each SCI entity 

to establish, maintain, and enforce 

reasonably designed written policies 

and procedures that include the criteria 

for identifying responsible SCI 

personnel, the designation and 

documentation of responsible SCI 

personnel, and escalation procedures to 

quickly inform responsible SCI 


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