Federal Register / Vol. 86, No. 119 / Thursday, June 24, 2021 / Notices 33393 

1This notice was issued on June 15, 2021. Due 

to unexpected publication schedule changes, earlier 

advance publication was not possible. 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

4The Exchange initially filed the proposed fee 

changes June 1, 2021 (SRCboeBZX–2021–044). On 

June 9, 2021, the Exchange withdrew that filing and 

submitted this proposal. 

5See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (May 26, 2021), 

available at https://markets.cboe.com/us/equities/ 

market_statistics/. 

6 ADV means average daily volume calculated as 

the number of shares added or removed, combined, 

per day. ADV is calculated on a monthly basis. 

7 Fee code B is appended to displayed orders 

adding liquidity to BZX (Tape B). 

8 Fee code V is appended to displayed orders 

adding liquidity to BZX (Tape A). 

Statements also will be available for 

website viewing and printing in the 

Commission’s Public Reference Room, 

100 F Street NE, Room 1580, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. For up-to-date 

information on the availability of the 

Public Reference Room, please refer to 

https://www.sec.gov/fast-answers/ 

answerspublicdocshtm.html or call 

(202) 551–5450. 

All statements received will be posted 

without change. Persons submitting 

comments are cautioned that we do not 

redact or edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. 

FOR FURTHER INFORMATION CONTACT: 

Christian Broadbent, Senior Special 

Counsel, or Jay Williamson, Branch 

Chief, at (202) 551–6720, Division of 

Investment Management, Securities and 

Exchange Commission, 100 F Street NE, 

Washington, DC 20549–3628. 

SUPPLEMENTARY INFORMATION: In 

accordance with Section 10(a) of the 

Federal Advisory Committee Act, 5 

U.S.C.–App. 1, and the regulations 

thereunder, Sarah ten Siethoff, 

Designated Federal Officer of the 

Committee, has ordered publication of 

this notice.1

Dated: June 15, 2021. 

Vanessa A. Countryman, 

Committee Management Officer. 

[FR Doc. 2021–13206 Filed 6–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92201; File No. SR– 

CboeBZX–2021–045] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule 

June 17, 2021. 

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

Securities Exchange Act of 1934 (the 

‘‘Act’’) 2 and Rule 19b–4 thereunder,3

notice is hereby given that, on June 9, 

2021, 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’’ or ‘‘BZX 

Equities’’) is filing with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend its fee schedule. The text of 

the proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://markets.cboe.com/us/ 

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 define the term ‘‘StepUp ADV’’ and introduce a new Single 

Market Participant Identifier (‘‘MPID’’) 

Investor Tier.4

The Exchange first notes that it 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. More 

specifically, the Exchange is only one of 

16 registered equities exchanges, as well 

as a number of alternative trading 

systems and other off-exchange venues 

that do not have similar self-regulatory 

responsibilities under the Exchange Act, 

to which market participants may direct 

their order flow. Based on publicly 

available information,5 no single 

registered equities exchange has more 

than 15% of the market share. Thus, in 

such a low-concentrated and highly 

competitive market, no single equities 

exchange possesses significant pricing 

power in the execution of order flow. 

The Exchange in particular operates a 

‘‘Maker-Taker’’ model whereby it pays 

credits to Members that add liquidity 

and assesses fees to those that remove 

liquidity. The Exchange’s fee schedule 

sets forth the standard rebates and rates 

applied per share for orders that provide 

and remove liquidity, respectively. 

Particularly, for securities at or above 

$1.00, the Exchange provides a standard 

rebate of $0.0018 per share for orders 

that add liquidity and assesses a fee of 

$0.0030 per share for orders that remove 

liquidity. Additionally, in response to 

the competitive environment, the 

Exchange also offers tiered pricing 

which provides Members opportunities 

to qualify for higher rebates or reduced 

fees where certain volume criteria and 

thresholds are met. Tiered pricing 

provides an incremental incentive for 

Members to strive for higher tier levels, 

which provides increasingly higher 

benefits or discounts for satisfying 

increasingly more stringent criteria. 

The ‘‘definitions’’ section of the 

Exchange’s fee schedule defines various 

terms used throughout the fee schedule. 

The Exchange proposes to adopt a new 

definition for the term ‘‘Step-Up ADV’’. 

Specifically, as proposed ‘‘Step-up 

ADV’’ means ADV 6 in the relevant 

baseline month subtracted from current 

day ADV. Such definition would be 

referenced in Tiers designed to 

incentivize Members to grow their ADV 

from the baseline month, such as the 

proposed Single MPID Investor Tier, as 

discussed below. 

Pursuant to footnote 4 of the fee 

schedule, the Exchange currently offers 

the Single MPID Investor Tiers that 

provide Members an opportunity to 

receive an enhanced rebate from the 

standard rebate for liquidity adding 

orders that yield fee codes B,7 V,8 and 


khammond on DSKJM1Z7X2PROD with NOTICES
33394 Federal Register / Vol. 86, No. 119 / Thursday, June 24, 2021 / Notices 

9 Fee code Y is appended to displayed orders 

adding liquidity to BZX (Tape C). 10 ADAV means average daily added volume 

calculated as the number of shares added per day. 

ADAV is calculated on a monthly basis. 

11 TCV means total consolidated volume 

calculated as the volume reported by all exchanges 

and trade reporting facilities to a consolidated 

transaction reporting plan for the month for which 

the fees apply. 

12 15 U.S.C. 78f. 

13 15 U.S.C. 78f(b)(4) and (5). 

Y 9 and meet certain required volumebased criteria. Specifically, Tier 1 of the 

Single MPID Investor Tiers provides an 

enhanced rebate of $0.0031 per share 

when (1) an MPID has an ADAV 10 as a 

percentage of TCV 11 greater than or 

equal to 0.30%; and (2) the MPID has an 

ADAV as a percentage of ADV greater 

than or equal to 90%. Tier 2 of the 

Single MPID Investor Tiers provides an 

enhanced rebate of $0.0032 per share 

when (1) an MPID has an ADAV as a 

percentage of TCV greater than or equal 

to 0.75%; and (2) the MPID has an 

ADAV as a percentage of ADV greater 

than or equal to 80%. 

Now, the Exchange proposes to offer 

Tier 3 of the Single MPID Investor Tiers. 

Proposed Tier 3 would provide a rebate 

of $0.0032 per share in Tape B securities 

(i.e., orders yielding fee code B) and 

$0.0033 per share in Tape A and C 

securities (i.e., orders yielding fee codes 

V and Y, respectively) when (1) an 

MPID has a Step-Up ADV as a 

percentage of TCV is greater than or 

equal to 0.10% from May 2021; or an 

MPID has a Step-Up ADV greater than 

or equal to 8,000,000 from May 2021; 

and (2) the MPID has an ADAV as a 

percentage of TCV greater than or equal 

to 0.55%; or the MPID has an ADAV 

greater than or equal to 50,000,000. 

Members that achieve the proposed 

Single MPID Investor Tier must 

therefore increase the amount of 

liquidity that they provide on BZX, 

thereby contributing to a deeper and 

more liquid market. Furthermore, the 

Exchange proposes to offer a higher 

rebate for Tape A and C securities to 

further incentivize Members to increase 

their liquidity on the Exchange in those 

securities. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,12

in general, and furthers the objectives of 

Section 6(b)(4) and 6(b)(5),13 in 

particular, as it is designed to provide 

for the equitable allocation of reasonable 

dues, fees and other charges among its 

Members, issuers and other persons 

using its facilities. The Exchange 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. The 

proposed rule changes reflect a 

competitive pricing structure designed 

to incentivize market participants to 

direct their order flow to the Exchange, 

which the Exchange believes would 

enhance market quality to the benefit of 

all Members. 

In particular, the Exchange notes that 

volume-based rebates such as that 

proposed herein have been widely 

adopted by exchanges, including the 

Exchange, and are equitable because 

they are open to all Members on an 

equal basis and provide additional 

benefits or discounts that are reasonably 

related to: (i) The value to an exchange’s 

market quality; (ii) associated higher 

levels of market activity, such as higher 

levels of liquidity provision and/or 

growth patterns; and (iii) introduction of 

higher volumes of orders into the price 

and volume discovery processes. The 

Exchange believes that the proposed 

Single MPID Investor Tier 3 is a 

reasonable, fair and equitable, and not 

unfairly discriminatory allocation of 

fees and rebates because it will continue 

to provide Members with an incentive 

to reach certain volume thresholds on 

the Exchange. 

More specifically, the Exchange 

believes the proposed additional Single 

MPID Investor Tier is a reasonable 

means to encourage Members to 

increase their liquidity on the Exchange 

in order to meet the proposed criteria to 

receive the proposed enhanced rebates. 

The Exchange further believes that the 

proposed tier represents an equitable 

allocation of reasonable dues, fees, and 

other charges because the threshold 

necessary to achieve the tier encourages 

Members to add increased liquidity to 

the BZX and the Exchange believes the 

proposed enhanced rebates are 

commensurate with the proposed 

thresholds. The Exchange also believes 

that it is an equitable allocation of 

reasonable fees to offer a different 

enhanced rebate for Tape B securities as 

compared to Tape A and C securities 

under proposed Tier 3 of the Single 

MPID Investor Tiers. As described 

above, enhanced rebates are designed to 

incentivize increased liquidity on the 

Exchange, and the Exchange believes 

that the proposal to offer a higher 

enhanced rebate for Tape A and C 

securities will incentivize increased 

liquidity in Tape A and C securities 

specifically. Furthermore, the Exchange 

believes the proposed rebate for Tape B 

is sufficient to incentivize increased 

liquidity in those securities. The 

increased liquidity benefits all investors 

by deepening the Exchange’s liquidity 

pool, 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 rebates are reasonable 

based on the difficulty of satisfying the 

tier’s proposed criteria as compared to 

the existing Single MPID Investor Tiers, 

which provide equal or lower rebates for 

less stringent criteria. Furthermore, the 

Exchange believes that the proposed tier 

is not unfairly discriminatory as it 

applies to all Members that meet the 

required criteria. 

Additionally, a number of Members 

have a reasonable opportunity to satisfy 

proposed Single MPID Investor Tier 3, 

which the Exchange believes is more 

stringent than existing Tier 1 and Tier 

2. While the Exchange has no way of 

knowing whether this proposed rule 

change would definitively result in any 

particular Member qualifying for the 

proposed tier, the Exchange anticipates 

at least two Members to compete for and 

reasonably achieve the proposed tier; 

however, the proposed tier is open to 

any Member that satisfies the tier’s 

criteria. The Exchange believes the 

proposed tier could provide an 

incentive for other Members to submit 

additional liquidity on the Exchange to 

qualify for the proposed enhanced 

rebate. 

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 the proposed 

change to adopt a new Single MPID 

Investor Tier burdens competition, but 

rather, enhances competition as it is 

intended to increase the 

competitiveness of BZX by adopting an 

additional pricing incentive in order to 

attract order flow and incentivize 

participants to increase their 

participation on the Exchange. 

As previously discussed, the 

Exchange operates in a highly 

competitive market. In such an 

environment, the Exchange must 

continually review, and consider 

adjusting, its fees and rebates to remain 

competitive with other exchanges. 

Members have numerous alternative 

venues that they may participate on and 

direct their order flow, including other 

equities exchanges, off-exchange 

venues, and alternative trading systems. 

Additionally, the Exchange represents a 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 119 / Thursday, June 24, 2021 / Notices 33395 

14 Supra note 3[sic]. 

15 See Securities Exchange Act Release No. 51808 

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

16 NetCoalition 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)). 

17 15 U.S.C. 78s(b)(3)(A). 

18 17 CFR 240.19b–4(f). 

19 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. 91767 

(May 4, 2021), 86 FR 25026. 

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

small percentage of the overall market. 

Based on publicly available information, 

no single equities exchange has more 

than 15% of the market share.14

Therefore, no exchange possesses 

significant pricing power in the 

execution of order flow. Indeed, 

participants can readily choose to send 

their orders to other exchange and offexchange venues if they deem fee levels 

at those other venues to be more 

favorable. Moreover, the Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 15 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’. . . .’’.16 Accordingly, the 

Exchange does not believe its proposed 

fee changes 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 17 and paragraph (f) of Rule 

19b–4 18 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– 

CboeBZX–2021–045 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–2021–045. 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–CboeBZX–2021–045, and 

should be submitted on or before July 

15, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–13243 Filed 6–23–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92204; File No. SR–CBOE– 

2021–029] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Designation 

of a Longer Period for Commission 

Action on a Proposed Rule Change To 

Increase Position Limits for Options on 

Certain Exchange-Traded Funds and 

an Exchange-Traded Note 

June 17, 2021. 

On April 21, 2021, Cboe Exchange, 

Inc. (‘‘Exchange’’) 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 

increase position limits for options on 

certain exchange-traded funds and an 

exchange-traded note. The proposed 

rule change was published for comment 

in the Federal Register on May 10, 

2021.3

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 


khammond on DSKJM1Z7X2PROD with NOTICES