Federal Register / Vol. 87, No. 12 / Wednesday, January 19, 2022 / Notices 2971 

28 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3 See Securities Exchange Act Release No. 93677 

(November 29, 2021), 86 FR 68703. 

4 15 U.S.C. 78s(b)(2). 

5 Id. 

6 17 CFR 200.30–3(a)(31). 

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

2 17 CFR 240.19b–4. 

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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

EMERALD–2021–45 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–EMERALD–2021–45. 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 (http://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 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–EMERALD–2021–45, and 

should be submitted on or before 

February 9, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00880 Filed 1–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93958; File No. SR–CBOE– 

2021–068] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Designation 

of Longer Period for Commission 

Action on a Proposed Rule Change To 

Adopt a Modified Trading Schedule for 

Holidays 

January 12, 2022. 

On November 15, 2021, Cboe 

Exchange, Inc. filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

adopt a modified trading schedule for 

holidays. The proposed rule change was 

published for comment in the Federal 

Register on December 3, 2021.3 The 

Commission has received no comment 

letters on the proposed rule change. 

Section 19(b)(2) of the Act 4 provides 

that, within 45 days of the publication 

of notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is January 17, 

2022. 

The Commission hereby is extending 

the 45-day time period for Commission 

action on the proposed rule change. The 

Commission finds that it is appropriate 

to designate a longer period within 

which to take action on the proposed 

rule change so that it has sufficient time 

to consider the proposed rule change. 

Accordingly, pursuant to Section 

19(b)(2) of the Act,5 the Commission 

designates March 3, 2022, as the date by 

which the Commission shall either 

approve or disapprove, or institute 

proceedings to determine whether to 

disapprove, the proposed rule change 

(File No. SR–CBOE–2021–068). 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.6

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00872 Filed 1–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93955; File No. SR–CBOE– 

2021–076] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Its Fees 

Schedule 

January 12, 2022. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on December 

30, 2021, Cboe Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘Cboe Options’’) filed 

with the Securities and Exchange 

Commission (the ‘‘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 Exchange, Inc. (the ‘‘Exchange’’ 

or ‘‘Cboe Options’’) proposes to amend 

its Fees 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://www.cboe.com/ 

AboutCBOE/CBOELegal

RegulatoryHome.aspx), at the 

Exchange’s Office of the Secretary, and 

at the Commission’s Public Reference 

Room. 


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3 Non-Market-Makers include Customers 

(capacity ‘‘C’’), Clearing Trading Permit Holders 

(capacity ‘‘F’’), Non-Clearing Trading Permit Holder 

Affiliates (capacity ‘‘L’’), Broker-Dealers (capacity 

‘‘B’’), Joint Back-Offices (capacity ‘‘J’’), Non-Trading 

Permit Holder Market-Makers (capacity ‘‘N’’), and 

Professionals (capacity ‘‘U’’). Capacity ‘‘M’’ applies 

to Market-Makers. 

4 See Cboe Options Fees Schedule, Rate Table— 

Underlying Symbol List A, Execution Surcharge, 

SPX (not including SPXW) and SPESG, which 

assesses a surcharge fee of $0.21 per contract for 

non-Market-Maker orders in SPX and SPESG. 

5 See Securities Exchange Release Nos. 74854 

(April 30, 2015), 80 FR 26124 (May 6, 2015) (SR– 

CBOE–2015–041); and 74422 (March 4, 2015), 80 

FR 12680 (March 10, 2015) (SR–CBOE–2015–020). 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fees Schedule in connection with 

certain surcharges, a trading floorrelated fee and its Global Trading Hours 

(‘‘GTH’’) Cboe Volatility Index (‘‘VIX’’) 

options/VIX weekly (‘‘VIXW’’) options 

and S&P 500 Index (‘‘SPX’’) options/ 

SPX weekly (‘‘SPXW’’) LMM Incentive 

Programs, effective January 2, 2022. 

First, the Exchange proposes to 

amend the Execution Surcharge fee in 

Rate Table—Underlying Symbol List A 

of the Fees Schedule applicable to nonMarket-Maker orders 3 executed 

electronically in SPXW options. 

Currently, a surcharge fee of $0.13 per 

contract is assessed for non-MarketMaker orders executed electronically in 

SPXW. The proposed rule change 

slightly increases this surcharge fee 

from $0.13 per contract to $0.14 per 

contract. The Exchange notes that the 

proposed SPXW Execution Surcharge 

fee is still less than the Execution 

Surcharge fee assessed for SPX and 

SPESG transactions.4

Next, the Exchange proposes to 

marginally increase the Index License 

Surcharge fees currently applicable to 

orders executed in SPX (including 

SPXW) options in Rate Table— 

Underlying Symbol List A and to orders 

executed in MSCI Emerging Markets 

Index (‘‘MXEF’’) options and MSCI 

EAFE Index (‘‘MXEA’’) options 

(collectively, ‘‘MSCI options’’) in Rate 

Table—All Products Excluding 

Underlying Symbol List A. Specifically, 

the Exchange currently assesses an 

Index License Surcharge fee of $0.17 per 

contract for non-Customer orders 

executed in SPX/SPXW and an Index 

License Surcharge fee of $0.10 per 

contract for non-Customer orders 

executed in MSCI options. The 

proposed rule change increases the 

Index License Surcharge fee applicable 

to orders executed in SPX/SPXW from 

$0.17 per contract to $0.18 per contract 

and the Index License Surcharge fee 

applicable to orders executed in MSCI 

options from $0.10 per contract to $0.12 

per contract. The Exchange notes that 

the Index License Surcharge fees in 

place for SPX/SPXW and MSCI options 

are designed to recoup some of the costs 

associated with the licenses for these 

indexes.5 The Exchange has recently 

renewed its license arrangements for its 

SPX and MSCI index licenses and, as a 

result, the proposed rule change amends 

the Index License Surcharge fees for 

SPX/SPXW and MSCI options in order 

to continue to offset some of the costs 

associated with the licenses for these 

indexes. 

Next, the Exchange proposes to 

amend a badge type in the Access 

Badges table of the Fees Schedule. 

Currently, a $70.00 fee is assessed for 

Clerk badges to access the Exchange’s 

trading floor. The Exchange proposes to 

extend this badge fee to clerks and other 

Trading Permit Hold (‘‘TPH’’) 

employees in order to cover TPH 

employees that also receive an access 

badge to the Exchange’s trading floor 

(e.g., TPH technical support personnel). 

The Exchange notes that badge access is 

optional and other TPH employees may 

continue to be admitted to the trading 

floor if signed in by authorized TPH 

personnel. 

Finally, the Exchange proposes to 

amend the rebates provided under its 

GTH1 and GTH2 VIX/VIXW LMM 

Incentive Programs and amend certain 

quote width categories under its GTH2 

SPX/SPXW LMM Incentive Program. In 

particular, the Exchange offers, among 

other LMM incentive programs, a GTH1 

VIX/VIXW LMM Incentive Program that 

applies during GTH from 7:15 p.m. CST 

to 2:00 a.m. CST (‘‘GTH1’’) and a GTH2 

VIX/VIXW LMM Incentive Program and 

GTH2 SPX/SPXW LMM Incentive 

Program that apply during GTH from 

2:00 a.m. CST to 8:15 a.m. CST 

(‘‘GTH2’’). The Exchange notes that 

these LMM incentive programs in the 

Fees Schedule provide a rebate to TPHs 

with LMM appointments to the 

respective incentive program that meet 

certain quoting standards in VIX/VIXW 

and SPX/SPXW, as applicable, in a 

month. The Exchange notes that 

meeting or exceeding the quoting 

standards in VIX/VIXW or SPX/SPXW 

to receive the applicable rebates (as 

currently offered and as proposed; 

described in further detail below) is 

optional for an LMM appointed to one 

of the GTH VIX/VIXW and SPX/SPXW 

LMM Incentive Programs. Rather, an 

LMM appointed to an incentive program 

is eligible to receive the corresponding 

rebate if it satisfies the applicable 

quoting standards (as currently offered 

and as proposed, described in further 

detail below), which the Exchange 

believes encourages an LMM to provide 

liquidity in the applicable program’s 

products during GTH. The Exchange 

may consider other exceptions to the 

programs’ quoting standards based on 

demonstrated legal or regulatory 

requirements or other mitigating 

circumstances. In calculating whether 

an LMM appointed to a GTH VIX/VIXW 

or GTH2 SPX/SPXW incentive program 

meets the applicable program’s quoting 

standards each month, the Exchange 

excludes from the calculation in that 

month the business day in which the 

LMM missed meeting or exceeding the 

quoting standards in the highest number 

of series. 

An LMM appointed to one of the GTH 

VIX/VIXW LMM Incentive Programs 

must provide continuous electronic 

quotes during GTH1 or GTH2, as 

applicable, that meet or exceed the 

quoting standards under the applicable 

program in at least 99% of each of the 

VIX and VIXW series, 90% of the time 

in a given month in order to receive a 

rebate for that month in the amount of 

$15,000 for VIX and $10,000 for VIXW 

(or pro-rated amount if an appointment 

begins after the first trading day of the 

month or ends prior to the last trading 

day of the month) for that month. The 

Exchange now proposes to increase each 

rebate amount received under the GTH1 

and GTH2 VIX/VIXW LMM Incentive 

Programs for meeting the applicable 

quoting standards in a given month in 

VIX and VIXW, by slightly increasing 

the rebate amount for VIX from $15,000 

to $20,000 and in VIXW, by slightly 

increasing the rebate amount from 

$10,000 to $15,000. The Exchange notes 

that no changes are being made to the 

quoting standards under the GTH1 or 

GTH2 VIX/VIXW LMM Incentive 

Programs. The Exchange wishes to 


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Federal Register / Vol. 87, No. 12 / Wednesday, January 19, 2022 / Notices 2973 

6 15 U.S.C. 78f(b). 

7 15 U.S.C. 78f(b)(5). 

8 15 U.S.C. 78f(b)(4). 

9See supra note 4. 

10See Securities Exchange Act Release No. 71295 

(January 14, 2014) 79 FR 3443 (January 21, 2014) 

(SR–CBOE–2013–129). 

further incentivize the LMMs appointed 

to the GTH VIX/VIXW LMM Incentive 

Programs to provide significant liquidity 

in VIX/VIXW options during all of GTH 

by meeting the applicable quoting 

standards currently under each program 

in order to receive the proposed 

increased rebates. 

An LMM appointed to the GTH2 SPX/ 

SPXW LMM Incentive Program must 

provide continuous electronic quotes 

during GTH2 that meet or exceed the 

quoting standards, provided below, in at 

least 85% of each of the SPX and SPXW 

series, 90% of the time in a given month 

in order to receive a rebate for that 

month in the amount of $15,000 for SPX 

and $35,000 for SPXW (or pro-rated 

amount if an appointment begins after 

the first trading day of the month or 

ends prior to the last trading day of the 

month) for that month. 

Premium level 

Expiring Near term Mid term Long term 

7 days or less 8 days to 60 days 61 days to 270 days 271 days to 500 days 

Width Size Width Size Width Size Width Size 

VIX Value at Prior Close <20 

$0.00–$5.00 ...................................................... $0.35 25 $0.40 15 $0.60 5 $1.20 5 

$5.01–$15.00 .................................................... 0.60 20 0.60 20 1.50 10 2.00 5 

$15.01–$50.00 .................................................. 1.20 15 2.00 15 2.00 10 4.00 5 

$50.01–$100.00 ................................................ 6.00 10 4.00 10 3.00 10 5.00 5 

$100.01–$200.00 .............................................. 15.00 1 5.00 5 4.00 5 6.00 5 

Greater than $200.00 ........................................ 20.00 1 8.00 1 12.00 1 50.00 1 

VIX Value at Prior Close from 20–30 

$0.00–$5.00 ...................................................... 0.60 15 0.80 10 0.75 5 2.00 5 

$5.01–$15.00 .................................................... 1.00 15 1.00 15 2.20 5 3.00 5 

$15.01–$50.00 .................................................. 2.50 10 3.50 10 3.0 5 5.00 5 

$50.01–$100.00 ................................................ 10.00 10 7.00 10 3.50 5 7.00 5 

$100.01–$200.00 .............................................. 18.00 1 8.00 5 6.00 5 10.00 5 

Greater than $200.00 ........................................ 25.00 1 12.00 1 2.00 1 60.00 1 

VIX Value at Prior Close >30 

$0.00–$5.00 ...................................................... 0.90 10 1.00 10 1.00 5 3.00 5 

$5.01–$15.00 .................................................... 2.50 10 2.50 10 3.00 5 4.00 5 

$15.01–$50.00 .................................................. 4.00 10 5.00 10 5.00 5 8.00 5 

$50.01–$100.00 ................................................ 12.00 5 10.00 5 4.50 3 10.00 1 

$100.01–$200.00 .............................................. 20.00 1 12.00 5 15.00 1 18.00 1 

Greater than 200.00 .......................................... 30.00 1 25.00 1 30.00 1 70.00 1 

The Exchange proposes to marginally 

widen certain quotes widths applicable 

when the VIX Index value at the prior 

close is less than 20 for SPX/SPXW 

options expiring in 7 days or less as 

follows: Widen the quote width that 

corresponds to the $5.01 to $15.00 

premium level from $0.60 to $0.80; 

widen the quote width that corresponds 

to a premium level of $15.01 to $50.00 

from $1.20 to $1.80; and widen the 

quote width that corresponds to the 

premium level of $50.01 to $100.00 

from $6.00 to $7.50. The Exchange notes 

that, generally, demand for and 

participation in SPX/SPXW options 

decreases as time to expiration 

decreases and, as a result, it becomes 

more difficult for LMMs to quote within 

specified widths and sizes for SPX/ 

SPXW options that expire in 7 days or 

less. As such, the proposed rule change 

is designed to slightly ease the quoting 

requirements under the expiration 

category of 7 days or less (when the VIX 

Index value is less than 20 at the prior 

close) by marginally widen certain 

quote widths in order to better enable 

and encourage LMMs to satisfy the 

quoting standards to receive the current 

monthly rebate applicable to SPX and/ 

or SPXW. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.6 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 7 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 

Section 6(b)(4) of the Act,8 which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Trading Permit Holders and other 

persons using its facilities. 

The Exchange believes amending the 

Execution Surcharge fee applicable to 

non-Market-Maker electronic orders in 

SPXW is reasonable as such fee is still 

lower than the Execution Surcharge fee 

applicable to non-Market-Maker orders 

transacted in SPX and SPESG.9

Additionally, the proposed increase 

helps to ensure that there is reasonable 

cost equivalence between the primary 

execution channels for SPXW. More 

specifically, the SPXW Surcharge fee 

was adopted to minimize the cost 

differentials between manual and 

electronic executions, which is in the 

interest of the Exchange as it must both 

maintain robust electronic systems as 

well as provide for economic 

opportunity for floor brokers to continue 

to conduct business, as they serve an 

important function in achieving price 

discovery and customer executions.10

The Exchange believes the proposed 

change is also equitable and not unfairly 


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discriminatory as it will continue to 

apply uniformly to all non-MarketMaker orders executed electronically in 

SPXW. 

The Exchange believes that it is 

reasonable to increase the amount of the 

Index License Surcharge fees for orders 

in SPX/SPXW and MSCI options as the 

proposed increases are consistent with 

the purpose of such surcharge fees as 

they are intended to continue to help 

recoup some of the costs associated with 

the license for such products in light of 

recently renewed license arrangements 

between the Exchange and the 

applicable index providers. The 

proposed Index License Surcharge fees 

are also equitable and not unfairly 

discriminatory because the surcharge 

fees will continue to be assessed 

uniformly for all non-Customer orders 

in SPX/SPXW and MSCI options, as 

applicable. 

The Exchange believes the proposed 

rule change to extend the access badge 

fee to other TPH employees, in addition 

to clerks, is reasonable as it is designed 

to cover TPH employees that also 

receive an access badge to the 

Exchange’s trading floor (e.g., TPH 

technical support personnel). The 

Exchange again notes that badge access 

is optional and other TPH employees 

may continue to be admitted to the 

trading floor if signed in by TPH 

personnel with badge access. The 

extension of the access badge fee to 

other TPH employees is equitable and 

not unfairly discriminatory because it 

will apply uniformly to all TPH 

employees that opt to receive an access 

badge. 

Regarding the GTH VIX/VIXW LMM 

Incentive Programs and the GTH2 SPX/ 

SPXW LMM Incentive Program, 

generally, the Exchange believes it is 

reasonable, equitable and not unfairly 

discriminatory to continue to offer these 

financial incentives, including as 

amended, to LMMs appointed to the 

programs, because it benefits all market 

participants trading in the 

corresponding products during GTH. 

These incentive programs encourage the 

LMMs appointed to such programs to 

satisfy the applicable quoting standards, 

which may increase liquidity and 

provide more trading opportunities and 

tighter spreads. Indeed, the Exchange 

notes that these LMMs serve a crucial 

role in providing quotes and the 

opportunity for market participants to 

trade VIX/VIXW and SPX/SPXW 

options, as applicable, which can lead 

to increased volume, providing for 

robust markets. The Exchange 

ultimately offers the LMM Incentive 

Programs, as amended, to sufficiently 

incentivize LMMs appointed to each 

incentive program to provide key 

liquidity and active markets in the 

corresponding program products during 

the corresponding trading sessions. The 

Exchange believes that these incentive 

programs, as amended, will continue to 

encourage increased quoting to add 

liquidity in each of the corresponding 

program products, thereby protecting 

investors and the public interest. The 

Exchange also notes that an LMM 

appointed to an incentive program may 

undertake added costs each month to 

satisfy that heightened quoting 

standards (e.g., having to purchase 

additional logical connectivity). 

In particular, the Exchange believes 

that the proposed increases to the 

rebates applicable to VIX and VIXW 

provided under the GTH VIX/VIXW 

LMM Incentive programs are reasonably 

designed to continue to incentivize an 

appointed LMM to meet the applicable 

quoting standards for VIX/VIXW 

options during GTH, thereby providing 

liquid and active markets, which 

facilitates tighter spreads, increased 

trading opportunities, and overall 

enhanced market quality to the benefit 

of all market participants. The Exchange 

further believes that the proposed rule 

change to amend the rebate amount 

received for VIX ($20,000) and VIXW 

options ($15,000) is reasonable because 

it is comparable to and within the range 

of the rebates offered by other LMM 

Incentive Programs. For example, the 

GTH SPX/SPXW LMM Programs 

currently offers $15,000 for SPX and 

$35,000 SPXW options in which the 

applicable quoting standards are met in 

a given month. The Exchange believes 

the proposed rebates applicable to the 

GTH VIX/VIXW LMM Incentive 

Programs are equitable and not unfairly 

discriminatory because they will 

continue to apply equally to any TPH 

that is appointed as an LMM to the 

GTH1 and GTH2 VIX/VIXW LMM 

Incentive Programs. 

The Exchange believes that it is 

reasonable to slightly ease the quoting 

requirements under the GTH2 SPX/ 

SPXW LMM Incentive Program by 

marginally widen certain quote widths 

for SPX/SPXW options that expire in 7 

days or less, wherein it becomes more 

difficult for LMMs to quote within 

specified widths, in order to better 

enable and encourage LMMs to satisfy 

the quoting standards to receive the 

current monthly rebate applicable to 

SPX and/or SPXW. As such, the 

Exchange believes the slightly wider 

quote widths are reasonably designed to 

facilitate LMMs appointed to the GTH2 

SPX/SPXW LMM Incentive Program in 

meeting the heightened quoting 

standards (in order to receive the 

current rebate offered under the 

program) by increasing their quoting 

activity and posting tighter spreads and 

more aggressive quotes in SPX/SPXW 

options during GTH2. An increase in 

quoting activity and tighter quotes tends 

to signal additional corresponding 

increase in order flow from other market 

participants, which benefits all 

investors by deepening the Exchange’s 

liquidity pool, potentially providing 

even greater execution incentives and 

opportunities, offering additional 

flexibility for all investors to enjoy cost 

savings, supporting the quality of price 

discovery, promoting market 

transparency and improving investor 

protection. The Exchange also believes 

that the proposed widths are reasonable 

because they remain generally aligned 

with the current heightened quoting 

standards in the program, as the 

proposed widths are only marginally 

larger than the current widths. The 

Exchange believes that the proposed 

increase in certain quote widths under 

the GTH2 SPX/SPXW LMM Incentive 

Program is equitable and not unfairly 

discriminatory because such quote 

widths will continue to apply equally to 

any and all TPHs with LMM 

appointments to the GTH2 SPX/SPXW 

LMM Incentive Program that seek to 

meet the program’s heightened quoting 

standards in order to receive the current 

rebates offered under the program. 

Additionally, the Exchange notes if an 

LMM appointed to the GTH VIX/VIXW 

LMM Incentive Programs or the GTH2 

SPX/SPXW LMM Incentive Program 

does not satisfy the corresponding 

quoting standards for any given month, 

then it simply will not receive the 

rebate(s) offered by the respective 

program for that month. 

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 intramarket or 

intermarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange does not believe that the 

proposed rule changes in connection 

with surcharge fees will impose any 

burden on intramarket competition 

because each applies uniformly to all 

similarly situated TPHs in a uniform 

manner (i.e., to all non-Market-Maker 

electronic executions in SPXW and to 

all non-Customer executions in SPX/ 

SPXW or MSCI options). Additionally, 

the access badge fee will apply 

uniformly to all other TPH employees in 

the same manner as it applies to all 

clerk badges today. The Exchange again 

notes that badge access is optional and 


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Federal Register / Vol. 87, No. 12 / Wednesday, January 19, 2022 / Notices 2975 

11See BOX FEE Schedule, Section VIII C, Trading 

Floor Participant Fees, which assesses a $100 badge 

fee for ‘‘all other registered on-floor persons 

employed by or associated with a Floor Market 

Maker or Floor Broker’’. 

12See Cboe Global Markets U.S. Options Market 

Volume Summary, Month-to-Date (December 17, 

2021), available at https://www.cboe.com/us/ 

options/market_statistics/. 

13See Securities Exchange Act Release No. 51808 

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

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)). 

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

16 17 CFR 240.19b–4(f). 

other TPH employees may continue to 

be admitted to the trading floor if signed 

in by TPH personnel with badge access. 

Additionally, the proposed changes to 

existing GTH VIX/VIXW and SPX/ 

SPXW LMM Incentive Programs will 

apply to all LMMs appointed to the 

applicable program classes (i.e., VIX/ 

VIXW and SPX/SPXW) in a uniform 

manner. To the extent these LMMs 

appointed to an incentive program 

receive a benefit that other market 

participants do not, as stated, these 

LMMs in their role as Mark-Makers on 

the Exchange have different obligations 

and are held to different standards. For 

example, Market-Makers play a crucial 

role in providing active and liquid 

markets in their appointed products, 

thereby providing a robust market 

which benefits all market participants. 

Such Market-Makers also have 

obligations and regulatory requirements 

that other participants do not have. The 

Exchange also notes that an LMM 

appointed to an incentive program may 

undertake added costs each month that 

it needs to satisfy that heightened 

quoting standards (e.g., having to 

purchase additional logical 

connectivity). The Exchange also notes 

that the incentive programs are designed 

to attract additional order flow to the 

Exchange, wherein greater liquidity 

benefits all market participants by 

providing more trading opportunities, 

tighter spreads, and added market 

transparency and price discovery, and 

signals to other market participants to 

direct their order flow to those markets, 

thereby contributing to robust levels of 

liquidity. 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed amendments to 

the surcharges and the LMM Incentive 

Programs, apply only to Exchange 

proprietary products, which are traded 

exclusively on Cboe Options. 

Additionally, the Exchange notes that at 

least one other options exchange 

assesses a badge fee for employees of 

on-floor registrants.11

Additionally, the Exchange notes that 

it operates in a highly competitive 

market. TPHs have numerous 

alternative venues that they may 

participate on and direct their order 

flow, including 15 other options 

exchanges, as well as off-exchange 

venues, where competitive products are 

available for trading. Based on publicly 

available information, no single options 

exchange has more than 15% of the 

market share.12 Therefore, no exchange 

possesses significant pricing power in 

the execution of option order flow. 

Indeed, participants can readily choose 

to send their orders to other exchange, 

and, additionally 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.’’ 13 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’. . . .’’.14 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 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. 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CBOE–2021–076 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–CBOE–2021–076. 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 (http://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 


jspears on DSK121TN23PROD with NOTICES1
2976 Federal Register / Vol. 87, No. 12 / Wednesday, January 19, 2022 / Notices 

17 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 93651 

(November 23, 2021), 86 FR 67996 (November 30, 

2021) (‘‘Notice’’). 

4See FINRA Rule 6710(a) (defining ‘‘TRACEEligible Security’’). 

5See Regulatory Notice 14–53 (November 2014). 

6See Notice, 86 FR at 67997. FINRA explained 

that members’ back-end systems are often 

programmed to clear against the counterparty 

identified on TRACE trade reports, and when the 

ATS is not involved in clearance and settlement, 

member subscribers often prefer to TRACE-report 

against the party with which they clear and settle 

the trade (i.e., another subscriber, rather than the 

ATS). See id. 

7See id. 

8See FINRA Rule 6732(a). 

9See FINRA Rule 6732(b). 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CBOE–2021–076 and 

should be submitted on or before 

February 9, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.17

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–00871 Filed 1–18–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

FEDERAL REGISTER CITATION OF PREVIOUS

ANNOUNCEMENT: To be published. 

PREVIOUSLY ANNOUNCED TIME AND DATE OF

THE MEETING: Thursday, January 20, 

2022 at 2 p.m. 

CHANGES IN THE MEETING: The Closed 

Meeting scheduled for Thursday, 

January 20, 2022 at 2 p.m. has been 

changed to Thursday, January 20, 2022 

at 2:15 p.m. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information and to ascertain 

what, if any, matters have been added, 

deleted or postponed, please contact 

Vanessa A. Countryman from the Office 

of the Secretary at (202) 551–5400. 

Authority: 5 U.S.C. 552b. 

Dated: January 13, 2022. 

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2022–01000 Filed 1–14–22; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–93966; File No. SR–FINRA– 

2021–029] 

Self-Regulatory Organizations; 

Financial Industry Regulatory 

Authority, Inc.; Order Approving 

Proposed Rule Change To Amend 

FINRA Rule 6732 and Expand the 

Scope of Exemptions That FINRA May 

Grant ATSs From the TRACE 

Reporting Requirements 

January 12, 2022. 

I. Introduction 

On November 15, 2021, the Financial 

Industry Regulatory Authority, Inc. 

(‘‘FINRA’’) filed with the Securities and 

Exchange Commission (‘‘Commission’’), 

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

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a 

proposed rule change to amend FINRA 

Rule 6732 (Exemption from Trade 

Reporting Obligation for Certain 

Transactions on an Alternative Trading 

System) to expand the scope of 

exemptions from the transaction 

reporting obligations of FINRA Rule 

6730 (Transaction Reporting) that 

FINRA may grant to a member 

alternative trading system (‘‘ATS’’). The 

proposed rule change was published for 

comment in the Federal Register on 

November 30, 2021.3 The Commission 

received no comments on the proposed 

rule change. This order approves the 

proposed rule change. 

II. Description of the Proposal 

FINRA Rule 6730(a) requires each 

FINRA member that is a Party to a 

Transaction in a TRACE-Eligible 

Security 4 to report the transaction to the 

Trade Reporting and Compliance Engine 

(‘‘TRACE’’). FINRA Rule 6710(e) defines 

‘‘Party to a Transaction’’ as an 

introducing broker-dealer (if any), an 

executing broker-dealer, or a customer. 

An alternative trading system (‘‘ATS’’) 

is a Party to a Transaction occurring 

through its system and has a TRACE 

transaction reporting obligation, unless 

an exception or exemption applies.5

FINRA Rule 6732 provides FINRA 

with the authority to exempt a member 

ATS from TRACE reporting obligations 

under FINRA Rule 6730. FINRA has 

stated that it adopted Rule 6732 in 

response to concerns raised by members 

regarding operational difficulties arising 

from the reporting of certain 

transactions on an ATS, particularly 

when the ATS does not have a role in 

the clearance and settlement for trades 

on its system.6 If FINRA grants an ATS 

an exemption under Rule 6732, a 

member subscriber of the ATS, when 

engaging in a trade on the ATS covered 

by the Rule 6732 exemption, must 

report against its counterparty (rather 

than the ATS), which mitigates these 

operational difficulties and facilitates 

clearance and settlement.7

Currently, under Rule 6732, FINRA 

may grant an ATS an exemption if the 

following criteria are satisfied: (1) A 

trade is between two FINRA members; 

(2) the trade does not pass through any 

ATS account, and the ATS seeking the 

exemption does not exchange TRACEEligible Securities or funds on behalf of 

the subscribers or take either side of the 

trade for clearing or settlement 

purposes, or in any other way insert 

itself into the trade; (3) the ATS seeking 

the exemption agrees to provide data 

relating to each exempted trade to 

FINRA on either a monthly basis or as 

otherwise proscribed by FINRA, and 

acknowledges that failure to meet this 

requirement would result in its 

exemption being revoked; (4) the ATS 

seeking the exemption pays the 

applicable reporting fee to FINRA; and 

(5) the ATS seeking the exemption has 

entered into a written agreement with 

each member that is a Party to a 

Transaction to ensure that each 

exempted trade is properly reported.8

Where these criteria are satisfied, an 

exempted trade occurring on the ATS 

must be reported by a member (other 

than the ATS) that meets the definition 

of ‘‘Party to a Transaction’’ identifying 

a counterparty other than the ATS with 

respect to each side of the trade.9

FINRA is now proposing to amend 

Rule 6732 to expand the scope of 

transactions that may be exempted 

under Rule 6732 to include trades that 

involve only one FINRA member (other 

than the ATS). Specifically, FINRA 

proposes to delete the current language 

in subparagraph (a)(1) of Rule 6732 that 

requires an exempted transaction to be 

between two FINRA members, and 


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