Federal Register / Vol. 86, No. 135 / Monday, July 19, 2021 / Notices 38137 

21 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

As noted above, the Exchange has in 

place surveillance procedures that are 

adequate to properly monitor trading in 

the Shares in all trading sessions and 

may obtain information via ISG from 

other exchanges that are members of ISG 

or with which the Exchange has entered 

into a CSSA. In addition, as noted 

above, investors will have ready access 

to information regarding the Trust’s 

bitcoin holdings, and quotation and last 

sale information for the Shares. 

For the above reasons, the Exchange 

believes that the proposed rule change 

is consistent with the requirements of 

Section 6(b)(5) of the Act, and in the 

best interest of investors and the public 

at large. 

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 purpose of the Act. The Exchange 

notes that the proposed rule change will 

facilitate the listing and trading of a new 

type of Commodity-Based Trust Share 

based on the price of bitcoin that will 

enhance competition among market 

participants, to the benefit of investors 

and the marketplace. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

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 up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the 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 (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

NYSEArca–2021–57 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–NYSEArca–2021–57. 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–NYSEArca–2021–57 and 

should be submitted on or before 

August 9, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.21

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15197 Filed 7–16–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92389; File No. SR–CBOE– 

2021–039] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fees 

Schedule With Respect to Certain Fees 

Related to Qualified Contingent Cross 

Orders and the Clearing Trading 

Permit Holder Fee Cap 

July 13, 2021. 

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 July 1, 

2021, Cboe Exchange, Inc. (the 

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

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

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

or ‘‘Cboe Options’’) proposes to amend 

the Fees Schedule with respect to 

certain fees related to Qualified 

Contingent Cross orders and the 

Clearing Trading Permit Holder (‘‘TPH’’) 

Fee Cap. The text of the proposed rule 

change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

website (http://www.cboe.com/ 

AboutCBOE/CBOELegal

RegulatoryHome.aspx), at the 

Exchange’s Office of the Secretary, and 

at the Commission’s Public Reference 

Room. 

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 


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38138 Federal Register / Vol. 86, No. 135 / Monday, July 19, 2021 / Notices 

3See Cboe Global Markets U.S. Options Monthly 

Market Volume Summary (June 29, 2021), available 

at https://markets.cboe.com/us/options/market_

statistics/. 

4See e.g., Cboe EDGX Options Fees Schedule, 

footnote 7, which offers rebates ranging from $0.14 

up to $0.26 based on QCC volume thresholds. 

5See e.g., NYSE American Options Fee Schedule, 

Section I, paragraph F ‘‘QCC Fees & Credits’’, which 

provides that non-customer participants excluding 

specialists and e-specialists, are assessed a fee of 

$0.20 per contract to volume executed as part of a 

QCC trade. See also MIAX Options Exchange Fee 

Schedule, Transaction Fees, QCC Fees, which 

assesses fees ranging from $0.00 up to $0.17 per 

contract for QCC trades depending on the type of 

market participant and initiator of the order. 

6See e.g., NYSE American Options Fee Schedule, 

Section I. paragraph I ‘‘Firm Monthly Fee Cap’’, 

which provides a fee cap ranging from $65,000 up 

to $100,000 per month per firm for manual 

transactions. See also PHLX Options Pricing 

Schedule, Section 4, Fee per contract, which 

provides a monthly fee cap of $75,000. 

7 15 U.S.C. 78f. 

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

9 15 U.S.C. 78f.(b)(5). 

10Supra note 5. 

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 

Fees Schedule with respect to Qualified 

Contingent Cross (‘‘QCC’’) transaction 

fees and the Clearing TPH fee cap. 

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 options venues to which market 

participants may direct their order flow. 

Based on publicly available information, 

no single options exchange has more 

than 15% of the market share.3 Thus, in 

such a low-concentrated and highly 

competitive market, no single options 

exchange possesses significant pricing 

power in the execution of option order 

flow. The Exchange believes that the 

ever-shifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow or discontinue to 

reduce use of certain categories of 

products in response to fee changes. 

Accordingly, competitive forces 

constrain the Exchange’s transaction 

fees, and market participants can readily 

trade on competing venues if they deem 

pricing levels at those other venues to 

be more favorable. In response to 

competitive pricing, the Exchange, like 

other options exchanges, offers rebates 

and assesses fees for certain order types 

executed on or routed through the 

Exchange. 

By way of background, a QCC order 

is comprised of an ‘initiating order’ to 

buy (sell) at least 1,000 contracts, 

coupled with a contra-side order to sell 

(buy) an equal number of contracts and 

that for complex QCC transactions, the 

1,000 contracts minimum is applied per 

leg. Currently, the Exchange assesses no 

fee for Customer (‘‘C’’ capacity), and 

Professional (‘‘U’’ capacity), and 

collectively referred to as ‘‘customer 

transactions’’ which are identified by 

fee code ‘‘QC’’) QCC transactions and 

$0.17 per contract side for nonCustomer transactions and nonProfessional transactions (collectively 

referred to as ‘‘non-customer 

transactions’’ which are identified by 

fee code ‘‘QN’’). In addition, the 

Exchange provides a $0.10 per contract 

credit for the initiating order side, 

regardless of origin code. Now, the 

Exchange proposes to increase the per 

contract credit for the initiating QCC 

order from $0.10 to $0.11 per contract. 

The proposed change is intended to 

incentivize TPHs to direct QCC order 

flow to the Exchange. Additionally, to 

offset the cost associated with the credit 

increase, the Exchange proposes to 

increase the transaction fee for QCC 

trades applied to non-customer 

transactions from $0.17 to $0.18 per 

contract. The proposed credit 4 and fee 5

change are in line with, yet also 

competitive with, rates assessed by 

other options exchanges. 

The Exchange also applies a 

transaction fee cap of $55,000 per 

month per Clearing TPH for nonfacilitation transactions executed in 

AIM, open outcry, or as a QCC or FLEX 

transaction in all products except Sector 

Indexes and products in Underlying 

Symbol List A as provided in footnote 

34 of the Fees Schedule. The Exchange 

proposes to increase such fee cap to 

$65,000 per month per Clearing TPH. 

The proposed fee cap is in line with, 

albeit lower than, similar fee caps 

applied by other Exchanges.6

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the 

Exchange Act of 1934 (the ‘‘Act’’),7 in 

general, and furthers the objectives of 

Section 6(b)(4),8 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its Trading Permit 

Holders (‘‘TPHs’’) and issuers and other 

persons using its facilities. The 

Exchange also believes that the 

proposed rule change is consistent with 

the objectives of Section 6(b)(5) 9

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, and, 

particularly, is not designed to permit 

unfair discrimination between 

customers, issuers, brokers, or dealers. 

As described above, the Exchange 

operates in a highly competitive market 

in which market participants can 

readily direct order flow to competing 

venues if they deem fee levels at a 

particular venue to be excessive or 

incentives to be insufficient. The 

proposed rule change reflects a 

competitive pricing structure designed 

to incentivize market participants to 

direct their order flow to the Exchange, 

which the Exchange believes would 

enhance market quality to the benefit of 

all TPHs. 

The Exchange believes that the 

proposed amendments to the Fees 

Schedule are reasonable, equitable and 

not unfairly discriminatory. In 

particular, the Exchange believes the 

proposal to increase the fee assessed to 

non-customer QCC trades is reasonable 

because the proposed fee is less than 

fees assessed for similar transactions on 

other exchanges.10 Furthermore, the 

proposed fee increase is intended to 

offset the cost associated with the 

proposed credit increase applied to the 

initiating order of a QCC trade. The 

Exchange believes the proposed fee 

increase is equitable and not unfairly 

discriminatory because it will apply 

equally to all non-customer transactions 

and the proposed change reflects a 

competitive pricing structure designed 

to compete with other exchanges that 

similarly assess fees to these market 

participants. 

The Exchange also believes the 

proposed credit increase applied to the 

initiating order of a QCC trade is 

reasonable because it is intended to 

incentivize market participants to direct 

their QCC order flow to the Exchange, 

which the Exchange believes would 

enhance market quality to the benefit of 

all TPHs. Additionally, the Exchange 

believes the proposed increase to the 

Clearing TPH transaction fee cap is 


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Federal Register / Vol. 86, No. 135 / Monday, July 19, 2021 / Notices 38139 

11Supra note 6. 

12 15 U.S.C. 78s(b)(3)(A). 

13 17 CFR 240.19b–4(f). 14 17 CFR 200.30–3(a)(12). 

reasonable because it is in line with 

similar fee caps offered on another 

exchange.11 The Exchange believes the 

proposed credit increase and fee cap 

increase are equitable and not unfairly 

discriminatory because they will each 

apply to all market participants equally. 

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. First, the 

Exchange notes that the proposed 

changes apply uniformly to similarlysituated TPHs. The Exchange believes 

the proposed rule change serves to 

increase intramarket competition by 

incentivizing TPHs to direct their QCC 

orders to the Exchange, which will bring 

greater volume and liquidity, thereby 

benefitting all market participants by 

providing more trading opportunities 

and tighter spreads. Further, the 

Exchange notes that other Exchanges 

provide similar fees and credits as it 

relates to QCC transactions, and also 

provide similar fee caps. 

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. 

TPHs have numerous alternative venues 

they may participate on and direct their 

order flow, including 15 other options 

exchanges. Additionally, the Exchange 

represents a small percentage of the 

overall market. Based on publicly 

available information, no single options 

exchange has more than 15% of the 

market share. Therefore, no exchange 

possesses significant pricing power in 

the execution of order flow. Indeed, 

participants can readily choose to send 

their orders to other exchanges if they 

deem fee levels at those other venues to 

be more favorable. As noted above, the 

Exchange believes that the proposed fee 

changes are comparable to that of other 

exchanges offering similar functionality. 

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.’’ 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’. . . .’’. Accordingly, the 

Exchange does not believe its proposed 

fee change imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any written 

comments from TPHs or other interested 

parties. 

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 12 and paragraph (f) of Rule 

19b–4 13 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CBOE–2021–039 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2021–039. 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–CBOE–2021–039 and 

should be submitted on or before 

August 9, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.14

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–15193 Filed 7–16–21; 8:45 am] 

BILLING CODE 8011–01–P 


lotter on DSK11XQN23PROD with NOTICES1