99930 Federal Register / Vol. 89, No. 238 / Wednesday, December 11, 2024 / Notices 

45 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

reasonable and consistent with the 

Exchange Act. 

In summary, (i) the proposed fees for 

Top of PHLX Options are comparable to 

those of MIAX, MIAX Emerald and 

Cboe; (ii) the proposed fees for PHLX 

Orders are comparable to those of 

MIAX, MIAX Emerald, and ISE; and (iii) 

the proposed PHLX TOPO Plus Orders 

fees offer a discount from the amount 

the customer would pay for TOPO and 

Orders separately, and, because these 

separate fees are comparable to those 

charged by other exchanges, the 

proposed discount for TOPO Plus 

Orders is reasonable. 

No Unfair Discrimination Between 

Customers, Issuers, Brokers, or Dealers 

The proposal is not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers 

because: (i) external distributors receive 

additional value not available to 

internal distributors; and (ii) these 

market data feeds will be available on a 

non-discriminatory basis. 

External Distributors receive 

additional value not available to 

Internal Distributors by disseminating 

information externally and typically 

charging for the service. This additional 

value supports higher fees for external 

distribution for TOPO, PHLX Orders, 

and TOPO Plus Orders. Higher fees for 

external distribution of data are 

common throughout the industry, and 

nearly universal among exchanges. The 

difference in value between internal and 

external distribution is also reflected in 

the current fee schedule, which has 

previously been shown to be consistent 

with the Exchange Act. 

The three market data feeds at issue 

here—TOPO, PHLX Orders, and TOPO 

Plus Orders—are used by a variety of 

market participants for a variety of 

purposes. Users include regulators, 

market makers, competing exchanges, 

media, retail, academics, portfolio 

managers. Market data feeds will be 

available to members of all of these 

groups on a non-discriminatory basis. 

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. 

Nothing in the Proposal burdens 

inter-market competition (the 

competition among self-regulatory 

organizations) because approval of the 

Proposal does not impose any burden 

on the ability of other options exchanges 

to compete. PHLX fees are comparable 

to, and in some cases less than, those of 

other exchanges, as discussed above. 

Nothing in the Proposal burdens 

intra-market competition (the 

competition among consumers of 

exchange data) because PHLX market 

data is available to any customer under 

the same fee schedule as any other 

customer, and any market participant 

that wishes to purchase PHLX market 

data can do so on a non-discriminatory 

basis. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission shall: (a) by order 

approve or disapprove such proposed 

rule change, or (b) institute proceedings 

to determine whether the proposed rule 

change should be 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– 

Phlx–2024–67 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–Phlx–2024–67. 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–Phlx–2024–67 and should be 

submitted on or before December 31, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.45

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–29040 Filed 12–10–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101825; File No. SR– 

CboeBZX–2024–122] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule Regarding Dedicated 

Cores 

December 5, 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 November 

26, 2024, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) 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 


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3The Exchange initially introduced pricing for 

Dedicated Cores on June 10, 2024 (SR–CboeBZX– 

2024–054). On August 1, 2024, the Exchange 

withdrew that filing and submitted SR–CboeBZX– 

2024–075. On business date September 30, 2024, 

the Exchange withdrew that filing and submitted 

SR–CboeBZX–2024–094. On November 26, 2024, 

the Exchange withdrew that filing and submitted 

this filing. 

4A User may be either a Member or Sponsored 

Participant. The term ‘‘Member’’ shall mean any 

registered broker or dealer that has been admitted 

to membership in the Exchange, limited liability 

company or other organization which is a registered 

broker or dealer pursuant to Section 15 of the Act, 

and which has been approved by the Exchange. A 

Sponsored Participant may be a Member or nonMember of the Exchange whose direct electronic 

access to the Exchange is authorized by a 

Sponsoring Member subject to certain conditions. 

See Exchange Rule 11.3. 

5Users may currently connect to the Exchange 

using a logical port available through an application 

programming interface (‘‘API’’), such as the Binary 

Order Entry (‘‘BOE’’) protocol. A BOE logical order 

entry port is used for order entry. 

6The Exchange currently assesses $550 per port 

per month. Port fees will also continue to be 

assessed on the first two Dedicated Cores that Users 

receive at no additional cost. See Cboe BZX Equities 

Fee Schedule. 

7See Securities Exchange Act Release No. 100395 

(June 21, 2024), 89 FR 53687 (June 27, 2024) (SR– 

CboeBZX–2024–054). 

8See Securities Exchange Act Release No. 101302 

(October 10, 2024), 89 FR 83727 (October 17, 2024) 

(SR–CboeBZX–2024–094). 

9The prescribed maximum quantity of Dedicated 

Cores for Members applies regardless of whether 

that Member purchases the Dedicated Cores directly 

from the Exchange and/or through a Service 

Bureau. In a Service Bureau relationship, a 

customer allows its MPID to be used on the ports 

of a technology provider, or Service Bureau. One 

MPID may be allowed on several different Service 

Bureaus. 

10The fee tier(s) applicable to Sponsoring 

Members are determined on a per Sponsored 

Continued 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX Equities’’) 

proposes 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/

equities/regulation/rule_filings/BZX/), 

at the Exchange’s Office of the 

Secretary, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

fee schedule to adopt fees for Dedicated 

Cores.3

By way of background, the Exchange 

recently began to allow Users 4 to assign 

a Single Binary Order Entry (‘‘BOE’’) 

logical order entry port 5 to a single 

dedicated Central Processing Unit (CPU 

Core) (‘‘Dedicated Core’’). Historically, 

CPU Cores had been shared by logical 

order entry ports (i.e., multiple logical 

ports from multiple firms may connect 

to a single CPU Core). Use of Dedicated 

Cores however, can provide reduced 

latency, enhanced throughput, and 

improved performance since a firm 

using a Dedicated Core is utilizing the 

full processing power of a CPU Core 

instead of sharing that power with other 

firms. This offering is completely 

voluntary and is available to all Users 

that wish to purchase Dedicated Cores. 

Users may utilize BOE logical order 

entry ports on shared CPU Cores, either 

in lieu of, or in addition to, their use of 

Dedicated Core(s). As such, Users are 

able to operate across a mix of shared 

and dedicated CPU Cores which the 

Exchange believes provides additional 

risk and capacity management. Further, 

Dedicated Cores are not required nor 

necessary to participate on the Exchange 

and as such Users may opt not to use 

Dedicated Cores at all. 

The Exchange proposes to assess the 

following monthly fees for Users that 

wish to use Dedicated Cores and adopt 

a maximum limit. First, the Exchange 

proposes to provide up to two Dedicated 

Cores to all Users who wish to use 

Dedicated Cores, at no additional cost. 

For the use of more than two Dedicated 

Cores, the Exchange proposes to assess 

the following fees: $650 per Dedicated 

Core for 3–15 Dedicated Cores; $850 per 

Dedicated Core for 16–30 Dedicated 

Cores; and $1,050 per Dedicated Core 

for 31 or more Dedicated Cores. The 

proposed fees are progressive and the 

Exchange proposes to include the 

following example in the Fees Schedule 

to provide clarity as to how the fees will 

be applied. Particularly, the Exchange 

will provide the following example: if a 

User were to purchase 16 Dedicated 

Cores, it will be charged a total of 

$9,300 per month ($0 * 2 + $650 * 13 

+ $850 * 1). The Exchange also proposes 

to make clear in the Fees Schedule that 

the monthly fees are assessed and 

applied in their entirety and are not 

prorated. The Exchange notes the 

current standard fees assessed for BOE 

Logical Ports, whether used with 

Dedicated or shared CPU cores, will 

remain applicable and unchanged.6

Since the Exchange currently has a 

finite amount of physical space in its 

data centers in which its servers (and 

therefore corresponding CPU Cores) are 

located, the Exchange also proposes to 

prescribe a maximum limit on the 

number of Dedicated Cores that Users 

may purchase each month. The purpose 

of establishing these limits is to manage 

the allotment of Dedicated Cores in a 

fair manner and to prevent the Exchange 

from being required to expend large 

amounts of resources in order to provide 

an unlimited number of Dedicated 

Cores. The Exchange previously 

established a limit for Members of a 

maximum number of 60 Dedicated 

Cores and Sponsoring Members a limit 

of a maximum number of 25 Dedicated 

Cores for each of their Sponsored 

Access relationships.7 The Exchange 

has since been able to procure 

additional physical space in its thirdparty data century as well as additional 

servers with CPU Cores and also has a 

better understanding of User demand 

relative to its available space and 

available Dedicated Cores since the 

initial launch of Dedicated Cores. After 

seeing increased User demand, the 

Exchange proposed to increase the cap 

and provided that Members will be 

limited to a maximum number of 80 

Dedicated Cores and Sponsoring 

Members will be limited to a maximum 

number of 35 Dedicated Cores for each 

of their Sponsored Access 

relationships.8 The Exchange noted at 

that time that it would continue 

monitoring Dedicated Core interest by 

all Users and allotment availability with 

the goal of increasing these limits to 

meet Users’ needs if and when the 

demand is there and/or the Exchange is 

able to accommodate additional 

Dedicated Cores. Since then, the 

Exchange has determined that it is able 

to accommodate an increased cap 

relative to current demand. As such, the 

Exchange proposes to increase the cap 

to 120 Dedicated Cores for Members, 

effective December 1, 2024.9 Sponsoring 

Members will continue to be limited to 

a maximum of 35 Dedicated Cores for 

each of their Sponsored Access 

relationships.10


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Access relationship basis and not on the combined 

total of Dedicated Cores across Sponsored Users. 

For example, under the proposed changes, a 

Sponsoring Member that has three Sponsored 

Access relationships is entitled to a total of 105 

Dedicated Cores for those 3 Sponsored Access 

relationships but would be assessed fees separately 

based on the 35 Dedicated Cores for each Sponsored 

User (instead of combined total of 105 Dedicated 

Cores). For example, a Sponsoring Member with 3 

Sponsored Access relationships would pay $30,450 

per month if each Sponsored Access relationship 

purchased the maximum 35 Dedicated Cores. More 

specifically, the Sponsoring Member would be 

provided 2 Dedicated Cores at no additional cost for 

each Sponsored User under Tier 1 (total of 6 

Dedicated Cores at no additional cost) and provided 

an additional 8 Dedicated Cores at $650 each for 

each Sponsored User, 5 Dedicated Cores at $850 

each for each Sponsored User and 20 Dedicated 

Cores at $1,050 each for each Sponsored User 

(combined total of 99 additional Dedicated Cores). 

11 15 U.S.C. 78f(b). 

12 15 U.S.C. 78f(b)(5). 

13 Id. 

14 15 U.S.C. 78f(b)(4). 

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.11 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 12 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) 13 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange also believes the 

proposed rule change is consistent with 

Section 6(b)(4) 14 of the Act, which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Members and other persons using its 

facilities. 

The Exchange believes the proposal is 

reasonable because the Exchange is 

offering any User who wishes to utilize 

Dedicated Cores up to two Dedicated 

Cores at no additional cost. For 

example, of the Users that currently 

maintain Dedicated Cores, 26% 

maintain only 1 or 2 Dedicated Cores 

and therefore pay no additional fees. 

The Exchange believes the proposed 

fees are reasonable because Dedicated 

Cores provide a valuable service in that 

it can provide reduced latency, 

enhanced throughput, and improved 

performance compared to use of a 

shared CPU Core since a firm using a 

Dedicated Core is utilizing the full 

processing power of a CPU Core. The 

Exchange also emphasizes however, that 

the use of Dedicated Cores is not 

necessary for trading and as noted 

above, is entirely optional. Users can 

also continue to access the Exchange 

through shared CPU Cores at no 

additional cost. Indeed, only 16% of the 

Exchange’s Members currently use 

Dedicated Cores and as noted above, of 

that 16%, only 26% take 1 or 2 

Dedicated Cores at no additional cost. 

Depending on a firm’s specific business 

needs, the proposal enables Users to 

choose to use Dedicated Cores in lieu of, 

or in addition to, shared CPU Cores (or 

as emphasized, not use Dedicated Cores 

at all). If a User finds little benefit in 

having Dedicated Cores based on its 

business model and trading strategies, 

or determines Dedicated Cores are not 

cost-efficient for its needs or does not 

provide sufficient value to the firm, 

such User may continue its use of the 

shared CPU Cores, unchanged. The 

Exchange also has no plans to eliminate 

shared CPU Cores nor to require Users 

to purchase Dedicated Cores. 

The Exchange has seen general 

interest in Dedicated Cores from a 

variety of market participants, with 

varying size and business models. Such 

market participants include proprietary 

trading firms (who tend to be more 

latency sensitive), as well as sell-side 

market participants and buy-side market 

participants (who tend to be less latency 

sensitive). For background, proprietary 

trading firms utilize their own capital to 

trade without taking outside money 

from clients. Due to the nature of their 

respective businesses, the Exchange has 

classified proprietary trading firms as 

latency sensitive, and other groups, 

such as buy-side hedge funds, sell-side 

banks and sell-side non-banks (such as 

agency brokers) as non-latency 

sensitive. Proprietary trading firms’ 

strategies may range from, marketing 

making, to relative value trading and 

arbitrage—these all rely on profiting 

from general market activity and, 

generally, requires faster entry and exit 

into trades and positions making 

proprietary trading firms more latency 

sensitive than other market segments. 

Buy-side hedge funds, banks and agency 

brokers are not as latency sensitive as 

strategy for hedge funds is based on 

overall long-term positioning in the 

market and banks and agency brokers 

may profit from commissions of 

customer order flow; both are generally 

strategies that are not reliant on speed 

to the same extent proprietary trading 

firms are. Further, Members have 

various reasons for obtaining Dedicated 

Cores. Some Members for example, may 

be seeking to further reduce latency, 

whereas others may use Dedicated Cores 

as a general risk mitigation by siloing 

their respective activity. Of further note, 

only 40% of Members that are propriety 

trading firms (who again, generally tend 

to be more latency sensitive) utilize 

Dedicated Cores, and of that 40%, 36% 

are only utilizing the 1 to 2 free 

Dedicated Cores available to all Users. 

As mentioned above, some non-latency 

sensitive firms have chosen to also 

adopt Dedicated Cores. 9% of Members 

that are not latency sensitive utilize 

Dedicated Cores, and of that 9%, 13% 

are only utilizing the 1 to 2 free 

Dedicated Cores available to all Users. 

The lack of universal, or even 

widespread, adoption by all such users 

therefore demonstrates that purchasing 

Dedicated Cores is not effectively a 

requirement to compete for any one type 

of market participant, including latency 

sensitive market participants. Instead, 

Dedicated Cores are an optional and 

voluntary connectivity offering, which 

market participants are free to choose 

whether or not to utilize based on 

whether they meet their unique 

business needs. Moreover, the Exchange 

has received overwhelming positive 

feedback and support for Dedicated 

Cores, with some Members even noting 

that they have moved more of their 

order flow to the Exchange and its 

affiliated equities exchanges (the 

‘‘Equities Exchanges’’) as they have 

noticed both better fills and greater 

consistency of order execution at the 

Equities Exchanges. This demonstrates 

that despite any incurred costs for 

Members that choose to purchase 

Dedicated Cores, it is ultimately a net 

win for them as they benefit from better 

execution. The Exchange believes it also 

demonstrates that Members find the 

proposed fees to be both reasonable and 

have benefited from purchasing or, at 

alternatively benefiting from the 

proposed one or two free Dedicated 

Cores available at no additional cost. 

The Exchange believes this is shown by 

both the level of demand for Dedicated 

Cores and the feedback from market 

participants, including as described 

above. The Exchange also believes it’s 

notable that no negative comment letters 

in connection with the proposed pricing 

have been received since the Exchange 


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15See e.g., Cboe U.S. Options Fee Schedule, BZX 

Options, Options Logical Port Fees, Ports with Bulk 

Quoting Capabilities. 

16The Exchange notes that it cannot currently 

convert shared CPU cores into Dedicated Cores. 

17The Exchange notes that approximately 5% of 

Users that have Dedicated Cores currently are at or 

near the maximum limits. The average number of 

Dedicated Cores used for the Exchange is 21. 

18See Securities Exchange Act Release No. 99983 

(April 17, 2024), 89 FR 30418 (April 23, 2024) (SR– 

CboeEDGA–2024–014) Securities Exchange Act 

Release No. 100300 (June 10, 2024), 89 FR 50653 

(June 14, 2024) (SR–CboeEDGA–2024–020); and 

Securities Exchange Act Release No. 100736 

(August 21, 2024), 89 FR 67696 (August 15, 2024) 

(SR–CboeEDGA–2024–032). 

19See e.g., Securities Exchange Act Release No. 

68342 (December 3, 2012), 77 FR 73096 (December 

7, 2012) (SR–CBOE–2012–114) and Securities 

Exchange Act Release No. 66082 (January 3, 2012), 

77 FR 1101 (January 9, 2012) (SR–C2–2011–041). 

first filed proposed fees for Dedicated 

Cores back on June 10, 2024. 

Additionally, as noted earlier, Members 

can (and many have) decide that 

utilizing even a free Dedicated Core is 

not needed for their business. 

Ultimately, this is a business decision 

that each Member must make and is best 

suited to determine and will ultimately 

depend on the priorities and strategies 

of that Member’s respective business 

needs. 

The Exchange also believes that the 

proposed Dedicated Core fees are 

equitable and not unfairly 

discriminatory because they continue to 

be assessed uniformly to similarly 

situated users in that all Users who 

choose to purchase Dedicated Cores will 

be subject to the same proposed tiered 

fee schedule. Moreover, all Users are 

entitled to up to 2 Dedicated Cores at no 

additional cost and, as previously 

discussed, 26% of all Users that take 

Dedicated Cores (including both latency 

sensitive and non-latency sensitive 

Users) take only 1 or 2 Dedicated Cores 

at no additional cost. The Exchange 

believes the proposed ascending fee 

structure is also reasonable, equitable 

and not unfairly discriminatory as it is 

designed so that firms that use a higher 

allotment of the Exchange’s finite 

number of Dedicated Cores pay higher 

rates, rather than placing that burden on 

market participants that have more 

modest needs who will have the 

flexibility of obtaining Dedicated Cores 

at lower price points in the lower tiers. 

As such, the proposed fees do not favor 

certain categories of market participants 

in a manner that would impose a 

burden on competition; rather, the 

ascending fee structure reflects the 

(finite) resources consumed by the 

various needs of market participants— 

that is, the lowest Dedicated Core 

consuming Users pay the least, and 

highest Dedicated Core consuming 

Users pay the most. Other exchanges 

similarly assess higher fees to those that 

consume more Exchange resources, 

including the Exchange on its options 

platform.15 Moreover, those consuming 

more Dedicated Cores do so if they find 

a benefit in having higher quantities of 

Dedicated Cores based on their 

respective business needs. The 

proposed tier structure is also designed 

to encourage firms to manage their 

needs in a fair manner and to prevent 

the Exchange from being required to 

expend large amounts of resources in 

order to provide an additional number 

of Dedicated Cores. Moreover, as 

discussed above and in more detail 

below, the Exchange cannot currently 

offer an unlimited number of Dedicated 

Cores due in part to physical space 

constraints in the third-party data 

center. The Exchange believes the 

proposed ascending fee structure is 

therefore another appropriate means, in 

conjunction with an established cap, to 

manage this finite resource and ensure 

the resource is apportioned more fairly. 

The Exchange believes it is reasonable 

to limit the number of Dedicated Cores 

Users can purchase because the 

Exchange has a finite amount of space 

in its third-party data centers to 

accommodate CPU cores, including 

Dedicated Cores. The Exchange must 

also take into account timing and cost 

considerations in procuring additional 

Dedicated Cores and related hardware 

such as servers, switches, optics and 

cables, as well as the readiness of the 

Exchange’s data center to accommodate 

additional Dedicated Cores in the 

Exchange’s respective Order Handler 

Cabinets.16 Moreover, procuring data 

center space has grown to be more 

challenging than it was five years ago 

with the increased demand for data 

center space. For example, the U.S. 

colocation data center market has 

doubled in size in just four years. In 

addition to the Exchange’s rollout of 

Dedicated Cores, the Exchange is 

mindful of its other business areas and 

the need to continue to be mindful of its 

existing, external restraints in procuring 

additional space in this area. The 

Exchange has, and will continue to, 

monitor market participant demand and 

space availability and endeavor to 

adjust the limit if and when the 

Exchange is able to acquire additional 

space and power within the third-party 

data centers and/or additional CPU 

Cores to accommodate additional 

Dedicated Cores.17 The Exchange 

monitors its capacity and data center 

space and thus is in the best place to 

determine these limits and modify them 

as appropriate in response to changes to 

this capacity and space, as well as 

market demand. For example, the 

Exchange’s affiliate Cboe EDGA 

Exchange, Inc. has increased the 

prescribed maximum limit three times 

since the launch of Dedicated Cores on 

its exchange on February 26, 2024 as a 

result of evaluating the demand relative 

to Dedicated Cores availability.18 The 

proposed increased limits continue to 

apply uniformly to similarly situated 

market participants (i.e., all Members 

are subject to the same limit and all 

Sponsored Participants are subject to 

the same limit, respectively). The 

Exchange believes it’s not unfairly 

discriminatory to provide for different 

limits for different types of Users. For 

example, the Exchange believes it’s not 

unfairly discriminatory to provide for an 

initial lower limit to be allocated for 

Sponsored Participants because unlike 

Members, Sponsored Participants are 

able to access the Exchange without 

paying a Membership Fee. Members 

also have more regulatory obligations 

and risk that Sponsored Participants do 

not. For example, while Sponsored 

Participants must agree to comply with 

the Rules of the Exchange, it is the 

Sponsoring Member of that Sponsored 

Participant that remains ultimately 

responsible for all orders entered on or 

through the Exchange by that Sponsored 

Participant. The industry also has a 

history of applying fees differently to 

Members as compared to Sponsored 

Participants.19 Lastly, the Exchange 

believes its proposed maximum limits, 

and distinction between Members and 

Sponsored Users, is another appropriate 

means to help the Exchange manage its 

allotment of Dedicated Cores and better 

ensure this finite resource is 

apportioned fairly. 

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 competition 

that is not necessary in furtherance of 

the purposes of the Act because the 

proposed tiered fee structure will apply 

equally to all similarly situated Users 

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 fees 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 


lotter on DSK11XQN23PROD with NOTICES1
99934 Federal Register / Vol. 89, No. 238 / Wednesday, December 11, 2024 / Notices 

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). 

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– 

CboeBZX–2024–122 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–CboeBZX–2024–122. 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–2024–122 and should be 

submitted on or before January 2, 2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–29043 Filed 12–10–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–660, OMB Control No. 

3235–0722] 

Submission for OMB Review; 

Comment Request; Extension: Form 

1–U 

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 

(44 U.S.C. 3501 et seq.), the Securities 

and Exchange Commission 

(‘‘Commission’’) has submitted to the 

Office of Management and Budget this 

request for extension of the previously 

approved collection of information 

discussed below. 

Form 1–U (17 CFR 239.93) is used to 

file current event reports by Tier 2 

issuers under Regulation A, an 

exemption from registration under the 

Securities Act of 1933 (15 U.S.C 77a et 

seq.). Form 1–U provides information to 

the public within four business days of 

fundamental changes in the nature of 

the issuer’s business and other 


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