Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices 106671 

32 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 

changes on July 3, 2023 (SR–CboeEDGA–2023–011). 

On September 1, 2023, the Exchange withdrew that 

filing and submitted SR–CboeEDGA–2023–015. On 

September 29, 2023, the Securities and Exchange 

Commission issued a Suspension of and Order 

Instituting Proceedings to Determine whether to 

Approve or Disapprove a Proposed Rule Change to 

Amend its Fees Schedule Related to Physical Port 

Fees (the ‘‘OIP’’) in anticipation of a possible U.S. 

government shutdown. On September 29, 2023, the 

Exchange filed the proposed fee change (SR– 

CboeEDGA–2023–016). On October 13, 2023, the 

Exchange withdrew that filing and submitted SR– 

CboeEDGA–2023–017. On December 12 2023, the 

Exchange withdrew that filing and submitted SR– 

CboeEDGA–2023–022. On February 9, 2024, the 

Exchange withdrew that filing and submitted SR– 

CboeEDGA–2024–006. On April 9, 2024, the 

Exchange withdrew that filing and submitted SR– 

CboeEDGA–2024–013. On June 7, 2024, the 

Exchange withdrew that filing and submitted SR– 

CboeEDGA–2024–022. On August 29, 2024, the 

Exchange withdrew that filing and submitted SR– 

CboeEDGA–2024–036. On October 25, 2024, the 

Exchange withdrew that filing and submitted SR– 

CboeEDGA–2024–043. On December 18, 2024, the 

Exchange withdrew that filing and submitted this 

filing. 

4See e.g., The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’), General 8, Connectivity to the 

Exchange. Nasdaq and its affiliated exchanges 

charge a monthly fee of $15,000 for each 10Gb Ultra 

fiber connection to the respective exchange, which 

is analogous to the Exchange’s 10Gb physical port. 

See also New York Stock Exchange LLC, NYSE 

American LLC, NYSE Arca, Inc., NYSE Chicago 

Inc., NYSE National, Inc. Connectivity Fee 

Schedule, which provides that 10 Gb LX LCN 

Circuits (which are analogous to the Exchange’s 10 

Gb physical port) are assessed $22,000 per month, 

per port. 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

CboeBYX–2024–048 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR-CboeBYX–2024–048. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (https://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 10 

a.m. and 3 p.m. Copies of the filing also 

will be available for inspection and 

copying at the principal office of the 

Exchange. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR-CboeBYX–2024–048 and should be 

submitted on or before January 21, 2025. 

For the Commission, by the Division 

of Trading and Markets, pursuant to 

delegated authority.32

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–30906 Filed 12–27–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101994; File No. SR– 

CboeEDGA–2024–051] 

Self-Regulatory Organizations; Cboe 

EDGA Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend its 

Fees Schedule Related to Physical 

Port Fees 

December 19, 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 December 

18, 2024, Cboe EDGA Exchange, Inc. 

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

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Cboe EDGA Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘EDGA Equities’’) 

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://markets.cboe.com/us/ 

equities/regulation/rule_filings/edga/), 

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 relating to physical 

connectivity fees.3

By way of background, a physical port 

is utilized by a Member or non-Member 

to connect to the Exchange at the data 

centers where the Exchange’s servers are 

located. The Exchange currently 

assesses the following physical 

connectivity fees for Members and nonMembers on a monthly basis: $2,500 per 

physical port for a 1 gigabit (‘‘Gb’’) 

circuit and $7,500 per physical port for 

a 10 Gb circuit. The Exchange proposes 

to increase the monthly fee for 10 Gb 

physical ports from $7,500 to $8,500 per 

port. The Exchange notes the proposed 

fee change better enables it to continue 

to maintain and improve its market 

technology and services and also notes 

that the proposed fee amount, even as 

amended, continues to be in line with, 

or even lower than, amounts assessed by 

other exchanges for similar 

connections.4 The Exchange also notes 

that a single 10 Gb physical port can be 

used to access the Systems of the 

following affiliate exchanges: the Cboe 


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5The Affiliate Exchanges are also submitting 

contemporaneous identical rule filings. 6The Exchange notes that conversely, other 

exchange groups charge separate port fees for access 

to separate, but affiliated, exchanges. See e.g., 

Securities and Exchange Release No. 99822 (March 

21, 2024), 89 FR 21337 (March 27, 2024) (SR– 

MIAX–2024–016). 7 15 U.S.C. 78f(b). 

8 15 U.S.C. 78f(b)(5). 

9 Id. 

10 15 U.S.C. 78f(b)(4). 

11See e.g., The Nasdaq Stock Market LLC 

(‘‘Nasdaq’’), General 8, Connectivity to the 

Exchange. Nasdaq and its affiliated exchanges 

charge a monthly fee of $15,000 for each 10Gbps 

Ultra fiber connection to the respective exchange, 

which is analogous to the Exchange’s 10Gbps 

physical port. See also New York Stock Exchange 

LLC, NYSE American LLC, NYSE Arca, Inc., NYSE 

Chicago Inc., NYSE National, Inc. Connectivity Fee 

Schedule, which provides that 10 Gbps LX LCN 

Circuits (which are analogous to the Exchange’s 10 

Gbps physical port) are assessed $22,000 per 

month, per port. 

12See https://www.bls.gov/ppi/overview.htm. 

13 Id. 

14Provisioning is the process of preparing, 

assigning, and activating IT infrastructure 

components, such as servers, storage, and network 

connectivity, according to user requirements. It is 

a critical part of IT operations, as it ensures that 

computing resources are available when needed 

and that they are set up and connected to work 

correctly. 

15See https://www.bls.gov/ppi/overview.htm. 

Among the industry-specific PPIs is for North 

American Industry Classification System (‘‘NAICS’’) 

Code 518210: ‘‘Data Processing and Related 

Services,’’ NAICS index codes categorize products 

and services that are common to particular 

industries. According to BLS, these codes ‘‘provide 

comparability with a wide assortment of industrybased data for other economic programs, including 

productivity, production, employment, wages, and 

earnings.’’ 

16See https://www.bls.gov/ppi/factsheets/ 

producer-price-index-for-the-data-processing-andrelated-services-industry-naics-518210.htm. 17See https://data.bls.gov/timeseries/ 

PCU5182105182105. 

BYX Exchange, Inc., Cboe BZX 

Exchange, Inc. (options and equities 

platforms), Cboe EDGX Exchange, Inc. 

(options and equities platforms), and 

Cboe C2 Exchange, Inc., (‘‘Affiliate 

Exchanges’’).5 Notably, only one 

monthly fee currently (and will 

continue) to apply per 10 Gb physical 

port regardless of how many affiliated 

exchanges are accessed through that one 

port.6

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.7 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 8 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) 9 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) 10 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. This belief is based on various 

factors as described below. 

First, the Exchange believes its 

proposal is reasonable as it reflects a 

moderate increase in physical 

connectivity fees for 10 Gb physical 

ports and its offering, even as amended, 

continues to be more affordable as 

compared to analogous physical 

connectivity offerings at competitor 

exchanges.11

The Exchange also believes the 

current fee does not properly reflect the 

quality of the service and product, as 

fees for 10 Gb physical ports have been 

static in nominal terms since 2018, and 

therefore falling in real terms due to 

inflation. As a general matter, the 

Producer Price Index (‘‘PPI’’) is a family 

of indexes that measures the average 

change over time in selling prices 

received by domestic producers of 

goods and services. PPI measures price 

change from the perspective of the 

seller. This contrasts with other metrics, 

such as the Consumer Price Index (CPI), 

that measure price change from the 

purchaser’s perspective.12 About 10,000 

PPIs for individual products and groups 

of products are tracked and released 

each month.13 PPIs are available for the 

output of nearly all industries in the 

goods-producing sectors of the U.S. 

economy—mining, manufacturing, 

agriculture, fishing, and forestry—as 

well as natural gas, electricity, and 

construction, among others. The PPI 

program covers approximately 69 

percent of the service sector’s output, as 

measured by revenue reported in the 

2017 Economic Census. 

For purposes of this proposal, the 

relevant industry-specific PPI is the 

Data Processing, hosting and related 

services (‘‘Data PPI’’) and more 

particularly the more granular service 

line Data Processing, Hosting and 

Related Services: Hosting, Active Server 

Pages (ASP), and Other Information 

Technology (IT) Infrastructure 

Provisioning Services.14

The Data PPI was introduced in 

January 2002 by the Bureau of Labor 

Statistics (‘‘BLS’’) as part of an ongoing 

effort to expand Producer Price Index 

coverage of the services sector of the 

U.S. economy and is identified as 

NAICS—518210 in the North American 

Industry Classification System 

(‘‘NAICS’’).15 According to the BLS 

‘‘[t]he primary output of NAICS 518210 

is the provision of electronic data 

processing services. In the broadest 

sense, computer services companies 

help their customers efficiently use 

technology. The processing services 

market consists of vendors who use 

their own computer systems—often 

utilizing proprietary software—to 

process customers’ transactions and 

data. Price movements for the NAICS 

518210 index are based on changes in 

the revenue received by companies that 

provide data processing services and 

price movements for the service line 

NAICS 518210 index are based on 

changes in the revenue received by 

companies that provide, among other 

things, IT infrastructure provisioning 

services. Each month, companies 

provide net transaction prices for a 

specified service. The transaction is an 

actual contract selected by probability, 

where the price-determining 

characteristics are held constant while 

the service is repriced. The prices used 

in index calculation are the actual 

prices billed for the selected service 

contract.’’ 16

The service (product) lines for which 

price indexes are available under the 

Data PPI are: (1) business process 

management services (2) data 

management and storage information 

transformation and other services and 

(3) hosting ASP and other IT 

infrastructure provisioning services. The 

most apt of these industry and product 

specific categorizations for purposes of 

this present proposal to modify fees for 

the 10 Gb physical port fee measures 

inflation for the provision of data 

processing, hosting and related services 

as well as other information technology 

infrastructure provisioning services 

which BLS identifies as identified as 

NAICS—5182105.17 The Exchange 

believes that this measure of inflation is 

particularly appropriate because the 

Exchange’s connectivity services 

involve hosting and providing 

connections to its customers’ 

telecommunications and information 


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18See https://www.usinflationcalculator.com/ 

inflation/consumer-price-index-and-annualpercent-changes-from-1913-to-2008/. 

19See Securities and Exchange Release No. 83449 

(June 15, 2018), 83 FR 28890 (June 21, 2018) (SR– 

CboeEDGA–2018–010). 

20See https://data.bls.gov/timeseries/ 

PCU5182105182105. 

21See, e.g., Securities Exchange Act Release Nos. 

34–100994 (September 10, 2024), 89 FR 75612 

(September 16, 2024) (SR–NYSEARCA–2024–79). 

technology equipment, as well as 

preparing, assigning, and activating IT 

infrastructure components, such as 

servers, storage, and network 

connectivity. The Exchange also uses its 

‘‘proprietary software,’’ i.e., its own 

proprietary matching engine software, to 

receive orders on the Exchange’s 

proprietary trading platform as well as 

to collect, organize, store and report 

customers’ transactions. In other words, 

the Exchange is in the business of data 

processing, hosting, ASP, and providing 

other IT infrastructure provisioning 

services. 

The Exchange further believes the 

Data PPI is an appropriate measure for 

purposes of the proposed rule change on 

the basis that it is a stable metric with 

limited volatility, unlike other 

consumer-side inflation metrics. In fact, 

the Data PPI has not experienced a 

greater than 2.16% increase for any one 

calendar year period since Data PPI was 

introduced into the PPI in January 2002. 

For example, the average calendar year 

change from January 2002 to December 

2023 was .62%, with a cumulative 

increase of 15.67% over this 21-year 

period. The Exchange believes the Data 

PPI is considerably less volatile than 

other inflation metrics such as CPI, 

which has had individual calendar-year 

increases of more than 6.5%, and a 

cumulative increase of over 73% over 

the same period.18

As noted above, the current 10 Gb 

physical port fee remained unchanged 

for six years, particularly since June 

2018.19 Since its last increase over 6 

years ago however, there has been 

notable inflation, including under the 

industry- and product-specific PPI, 

which as described above is a tailored 

measure of inflation. Particularly, the 

Hosting, ASP and other IT Infrastructure 

Provisioning Services inflation measure 

had a starting value of 102.2 in June 

2018 (the month the Exchange started 

assessing the current fee) and an ending 

value of 115.66 in November 2024, 

representing an 13% increase.20 This 

indicates that companies who are also 

in the hosting ASP and other IT 

infrastructure provisioning services 

have generally increased prices for a 

specified service covered under NAICS 

5182105 by an average of 13% during 

this period. 

The Exchange also believes that it is 

reasonable to increase its fees to 

compensate for inflation because, over 

time, inflation has degraded the value of 

each dollar that the Exchange collects in 

fees, such that the real revenue collected 

today is considerably less than that 

same revenue collected in 2018. The 

impact of this inflationary effect is also 

independent of any change in the 

Exchange’s costs in providing its goods 

and services. The Exchange therefore 

believes that it is reasonable for it to 

offset, in part, this erosion in the value 

of the revenues it collects. Additionally, 

the Exchange historically does not 

increase fees every year notwithstanding 

inflation. Other exchanges have also 

filed for increases in certain fees, based 

in part on comparisons to inflation.21

Accordingly, based on the abovedescribed percentage change based on 

an industry- and product-specific 

inflationary measure, and in 

conjunction with the rationale further 

described above and below, the 

Exchange believes the proposed fee 

increase is reasonable. 

Next, the Exchange believes 

significant investments into, and 

enhanced performance of, the Exchange, 

in the years following the last 10 Gb 

physical port fee increase support the 

reasonableness of the proposed fee 

increase. These investments enhanced 

the quality of its services, as measured 

by, among other things, increased 

throughput and faster processing 

speeds. Customers have therefore 

greatly benefitted from these 

investments, while the Exchange’s 

ability to recoup its investments has 

been hampered. 

For example, the Exchange and its 

affiliated exchanges recently launched a 

multi-year initiative to improve Cboe 

Exchange Platform performance and 

capacity requirements to increase 

competitiveness, support growth and 

advance a consistent world class 

platform. The goal of the project, among 

other things, is to provide faster and 

more consistent order handling and 

matching performance for options, 

while ensuring quicker processing time 

and supporting increasing volumes and 

capacity needs. For example, the 

Exchange recently performed switch 

hardware upgrades. Particularly, the 

Exchange replaced existing customer 

access switches with newer models, 

which the Exchange believes resulted in 

increased determinism. The recent 

switch upgrades also increased the 

Exchange’s capacity to accommodate 

more physical ports by nearly 50%. 

Network bandwidth was also increased 

nearly two-fold as a result of the 

upgrades, which among other things, 

can lead to reduce message queuing. 

The Exchange also believes these newer 

models result in less natural variance in 

the processing of messages. The 

Exchange notes that it incurred costs 

associated with purchasing and 

upgrading to these newer models, of 

which the Exchange has not otherwise 

passed through or offset. 

As of April 1, 2024, market 

participants also having the option of 

connecting to a new data center (i.e., 

Secaucus NY6 Data Center (‘‘NY6’’)), in 

addition to the current data centers at 

NY4 and NY5. The Exchange made NY6 

available in response to customer 

requests in connection with their need 

for additional space and capacity. In 

order to make this space available, the 

Exchange expended significant 

resources to prepare this space, and will 

also incur ongoing costs with respect to 

maintaining this offering, including 

costs related to power, space, fiber, 

cabinets, panels, labor and maintenance 

of racks. The Exchange also incurred a 

large cost with respect to ensuring NY6 

would be latency equalized, as it is for 

NY4 and NY5. 

The Exchange also has made various 

other improvements since the current 

physical port rates were adopted in 

2018. For example, the Exchange has 

updated its customer portal to provide 

more transparency with respect to firms’ 

respective connectivity subscriptions, 

enabling them to better monitor, 

evaluate and adjust their connections 

based on their evolving business needs. 

The Exchange also performs proactive 

audits on a weekly basis to ensure that 

all customer cross connects continue to 

fall within allowable tolerances for 

Latency Equalized connections. 

Accordingly, the Exchange expended, 

and will continue to expend, resources 

to innovate and modernize technology 

so that it may benefit its Members and 

continue to compete among other 

equities markets. The ability to continue 

to innovate with technology and offer 

new products to market participants 

allows the Exchange to remain 

competitive in the equities space which 

currently has 16 equities markets and 

potential new entrants. If the Exchange 

were not able to assess incrementally 

higher fees for its connectivity, it would 

effectively impact how the Exchange 

manages its technology and hamper the 

Exchange’s ability to continue to invest 

in and fund access services in a manner 

that allows it to meet existing and 

anticipated access demands of market 

participants. Disapproval of fee changes 

such as the proposal herein, could also 

have the adverse effect of discouraging 


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

23 17 CFR 240.19b–4(f). 

an exchange from improving its 

operations and implementing 

innovative technology to the benefit of 

market participants if it believes the 

Commission would later prevent that 

exchange from recouping costs and 

monetizing its operational 

enhancements, thus adversely 

impacting competition as well as the 

interests of market participants and 

investors. 

Finally, the proposed fee is also the 

same as is concurrently being proposed 

for its Affiliate Exchanges. Further, 

Members are able to utilize a single port 

to connect to all of its Affiliate 

Exchanges and will only be charged one 

single fee (i.e., a market participant will 

only be assessed the proposed $8,500 

even if it uses that physical port to 

connect to the Exchange and another (or 

even all 6) of its Affiliate Exchanges. 

Particularly, the Exchange believes the 

proposed monthly per port fee is 

reasonable, equitable and not unfairly 

discriminatory since as the Exchange 

has determined to not charge multiple 

fees for the same port. Indeed, the 

Exchange notes that several ports are in 

fact purchased and utilized across one 

or more of the Exchange’s affiliated 

Exchanges (and charged only once). 

The Exchange also believes that the 

proposed fee change is not unfairly 

discriminatory because it would be 

assessed uniformly across all market 

participants that purchase the physical 

ports. The Exchange believes increasing 

the fee for 10 Gb physical ports and 

charging a higher fee as compared to the 

1 Gb physical port is equitable as the 1 

Gb physical port is 1/10th the size of the 

10 Gb physical port and therefore does 

not offer access to many of the products 

and services offered by the Exchange 

(e.g., ability to receive certain market 

data products). Thus, the value of the 1 

Gb alternative is lower than the value of 

the 10 Gb alternative, when measured 

based on the type of Exchange access it 

offers. Moreover, market participants 

that purchase 10 Gb physical ports 

utilize the most bandwidth and 

therefore consume the most resources 

from the network. The Exchange also 

anticipates that firms that utilize 10 Gb 

ports will benefit the most from the 

Exchange’s investment in offering NY6 

as the Exchange anticipates there will be 

much higher quantities of 10 Gb 

physical ports connecting from NY6 as 

compared to 1 Gb ports. Indeed, the 

Exchange notes that 10 Gb physical 

ports account for approximately 90% of 

physical ports across the NY4, NY5, and 

NY6 data centers, and to date, 80% of 

new port connections in NY6 are 10 Gb 

ports. As such, the Exchange believes 

the proposed fee change for 10 Gb 

physical ports is reasonably and 

appropriately allocated. 

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. The 

proposed fee change will not impact 

intramarket competition because it will 

apply to all similarly situated Members 

equally (i.e., all market participants that 

choose to purchase the 10 Gb physical 

port). Additionally, the Exchange does 

not believe its proposed pricing will 

impose a barrier to entry to smaller 

participants and notes that its proposed 

connectivity pricing is associated with 

relative usage of the various market 

participants. For example, market 

participants with modest capacity needs 

can continue to buy the less expensive 

1 Gb physical port (which cost is not 

changing) or may choose to obtain 

access via a third-party re-seller. While 

pricing may be increased for the larger 

capacity physical ports, such options 

provide far more capacity and are 

purchased by those that consume more 

resources from the network. 

Accordingly, the proposed connectivity 

fees do not favor certain categories of 

market participants in a manner that 

would impose a burden on competition; 

rather, the allocation reflects the 

network resources consumed by the 

various size of market participants— 

lowest bandwidth consuming members 

pay the least, and highest bandwidth 

consuming members pays the most. 

The proposed fee change also does 

not impose a burden on competition or 

on other Self-Regulatory Organizations 

that is not necessary or appropriate. As 

described above, the Exchange 

evaluated its proposed fee change using 

objective and stable metric with limited 

volatility. Utilizing Data Processing PPI 

over a specified period of time is a 

reasonable means of recouping a portion 

of the Exchange’s investment in 

maintaining and enhancing the 

connectivity service identified above. 

The Exchange believes utilizing Data 

Processing PPI, a tailored measure of 

inflation, to increase certain 

connectivity fees to recoup the 

Exchange’s investment in maintaining 

and enhancing its services and products 

would not impose a burden on 

competition. 

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– 

CboeEDGA–2024–051 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–CboeEDGA–2024–051. 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 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 249 / Monday, December 30, 2024 / Notices 106675 

24 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially submitted the proposed 

rule change on August 30, 2024 and was effective 

September 3, 2024 (SR–CboeBZX–2024–082). On 

September 13, 2024, the Exchange withdrew that 

filing and submitted SR–CboeBZX–2024–088. On 

November 12, 2024, the Exchange withdrew that 

filing and submitted SR–CboeBZX–2024–113. On 

December 20, 2024, the Exchange withdrew that 

filing and submitted this filing. 

4See Exchange Rule 21.1 (l)(2), definition of 

‘‘logical port.’’ Logical ports include FIX and BOE 

ports (used for order entry), drop logical port 

(which grants users the ability to receive and/or 

send drop copies) and ports that are used for receipt 

of certain market data feeds. 5The term ‘‘Logical Ports’’ used herein shall refer 

to FIX and BOE ports (used for order entry). See 

Cboe BZX Options Fee Schedule, Options Logical 

Port Fees, ‘‘Logical Ports’’ (which exclude Purge 

Port, Multicast PITCH Spin Server Port or GRP 

Port). 6Purge Ports provide users the ability to cancel 

a subset (or all) of open orders across Executing 

Firm ID(s) (‘‘EFID(s)’’), Underlying symbol(s), or 

CustomGroupID(s), across multiple logical ports/ 

sessions. See Securities Exchange Act Release 

79956 (February 3, 2017), 82 FR 10102 (February 9, 

2017) (SR–BatsBZX–2017–05). See also https://

cdn.cboe.com/resources/membership/US_Options_

BOE_Specification.pdf and https://cdn.cboe.com/ 

resources/membership/US_Options_FIX_

Specification.pdf. 

7See Exchange Rule 21.1 (l)(3), definition of 

‘‘bulk port.’’ Bulk Ports provide users with the 

ability to submit and update multiple quote bids 

and offers in one message through logical ports 

enabled for bulk-quoting. 

8A matching engine is a part of the Exchange’s 

System that processes options quotes and trades on 

a symbol-by-symbol basis. Some matching engines 

will process option classes with multiple root 

symbols, and other matching engines will be 

dedicated to one single option root symbol (for 

example, options on SPY will be processed by one 

single matching engine that is dedicated only to 

SPY). A particular root symbol may only be 

assigned to a single designated matching engine. A 

particular root symbol may not be assigned to 

multiple matching engines. 

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–CboeEDGA–2024–051 and should 

be submitted on or before January 21, 

2025. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.24

Vanessa A. Countryman, 

Secretary. 

[FR Doc. 2024–30908 Filed 12–27–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–102024; File No. SR– 

CboeBZX–2024–131] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Adopt Fees 

for New Logical Ports in Connection 

With a New Connectivity Offering on 

Its Equity Options Platform 

December 20, 2024. 

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 

20, 2024, Cboe BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) 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 BZX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BZX’’) proposes to 

adopt fees for new logical ports in 

connection with a new connectivity 

offering on its equity options platform. 

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 Unitized 

Logical Ports, a new connectivity 

offering for its equity options platform 

(‘‘BZX Options’’) and adopt new 

Average Daily Quote and Average Daily 

Order fees.3

Unitized Port Fees 

By way of background, Exchange 

Members may interface with the 

Exchange’s Trading System by utilizing 

either the Financial Information 

Exchange (‘‘FIX’’) protocol or the Binary 

Order Entry (‘‘BOE’’) protocol. The 

Exchange further offers a variety of 

logical ports,4 which provide users of 

these ports with the ability within the 

Exchange’s System to accomplish a 

specific function through a connection, 

such as order entry, data receipt or 

access to information. For example, 

such ports include Logical Ports,5 Purge 

Ports,6 and Ports with Bulk Quoting 

Capabilities 7 (‘‘Bulk Ports’’). By way of 

further background, each of these ports 

corresponds to a single running order 

handler. Each order handler processes 

the messages it receives from these ports 

from the connected Members. This 

processing includes determining 

whether the message contains the 

required information to enter the 

System, whether the message 

parameters satisfy port-level (i.e., pretrade) risk controls, and where to send 

that message within the System (i.e., to 

which matching engine).8 Once an order 

handler completes the processing of a 

message, it sends that message to the 

appropriate matching engine. 

Historically, all order handlers 

connect to all matching engines. That is, 

under the BOEv2 and FIX protocols, 

Members were able to access all 

symbols from a single logical port since 

each port corresponds to a single order 

handler that conveniently connects to 

all matching engines (‘‘convenience 

layer’’). Although the Exchange 

configures the software and hardware 

for its order handlers in the same 

manner, there can be a natural variance 

in the amount of time it takes individual 

order handlers to process messages of 


ddrumheller on DSK120RN23PROD with NOTICES1