44116 Federal Register / Vol. 86, No. 152 / Wednesday, August 11, 2021 / Notices 

37 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. 92291 

(June 29, 2021), 86 FR 35551 (July 6, 2021) 

(‘‘Notice’’). 

4 15 U.S.C. 78s(b)(3)(A). A proposed rule change 

may take effect upon filing with the Commission if 

it is designated by the exchange as ‘‘establishing or 

changing a due, fee, or other charge imposed by the 

self-regulatory organization on any person, whether 

or not the person is a member of the self-regulatory 

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

5See Notice, supra note 3. 

6 15 U.S.C. 78s(b)(3)(C). 

7The Exchange defines internalized executions as 

an execution where two orders presented to the 

Exchange from the same ETP Holder (i.e., MPID) are 

presented separately and not in a paired manner, 

but nonetheless inadvertently match with one 

another. See Notice, supra note 3, at 35552 note 13. 

8See id. 

9 15 U.S.C. 78s(b)(3)(C). 

10 15 U.S.C. 78s(b)(1). 

11See 17 CFR 240.19b–4 (Item 3 entitled ‘‘SelfRegulatory Organization’s Statement of the Purpose 

of, and Statutory Basis for, the Proposed Rule 

Change’’). 

12See id. 

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

14 15 U.S.C. 78f(b)(5). 

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

16See Notice, supra note 3, at 35552. 

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–MEMX–2021–09 and 

should be submitted on or before 

September 1, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.37

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–17085 Filed 8–10–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92583; File No. SR– 

NYSEArca–2021–52] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Suspension of and Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove a 

Proposed Rule Change To Amend the 

NYSE Arca Equities Fees and Charges 

August 5, 2021. 

I. Introduction 

On June 14, 2021, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or the ‘‘Exchange’’) filed 

with the Securities and Exchange 

Commission (the ‘‘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 (File No. SR– 

NYSEArca–2021–52) to amend the 

NYSE Arca Equities Fees and Charges 

(‘‘Fee Schedule’’).3 The proposed rule 

change was immediately effective upon 

filing with the Commission pursuant to 

Section 19(b)(3)(A) of the Act.4 The 

proposed rule change was published for 

comment in the Federal Register on July 

6, 2021.5 The Commission received no 

comment letters regarding the proposed 

rule change. Pursuant to Section 

19(b)(3)(C) of the Act,6 the Commission 

is hereby: (1) Temporarily suspending 

File No. SR–NYSEArca–2021–52; and 

(2) instituting proceedings to determine 

whether to approve or disapprove File 

No. SR–NYSEArca–2021–52. 

II. Description of the Proposed Rule 

Change 

The Exchange proposes to establish a 

new category of Retail Order executions 

for purposes of the Fee Schedule. 

Specifically, the Exchange proposes that 

no fees or credits would apply for Retail 

Order executions that are denoted 

‘‘internalized’’ executions under certain 

circumstances.7 The Exchange proposes 

that no fees will be charged nor credits 

paid for Retail Orders where (i) each 

side of the executed order shares the 

same MPID, (ii) each side of the 

executed order is a Retail Order with a 

time-in-force of Day, and (iii) the above 

executed orders have an Average Daily 

Volume (‘‘ADV’’) of at least 150,000 

shares. 

Prior to the proposed rule change, 

Retail Orders that were internalized 8 on 

the Exchange were not identified in the 

Fee Schedule and were treated the like 

other Retail Orders, regardless of 

whether they were internalized 

executions, and regardless of ADV. 

Specifically, the Exchange provides a 

credit ranging from $0.0035 to $0.0038, 

depending on the step-up tier, to Retail 

Orders that provide liquidity, and 

charges no fee for Retail Orders that 

remove liquidity. Therefore, the 

proposal carves out a particular group of 

Retail Orders—internalized orders when 

such orders have an ADV of at least 

150,000 shares—and eliminates the 

credits for those Retail Orders that 

provide liquidity. ETP Holders with an 

ADV under 150,000 of internalized 

Retail Orders would continue to receive 

the relevant credit for Retail Orders that 

provide liquidity. 

III. Suspension of the Proposed Rule 

Change 

Pursuant to Section 19(b)(3)(C) of the 

Act,9 at any time within 60 days of the 

date of filing of an immediately effective 

proposed rule change pursuant to 

Section 19(b)(1) of the Act,10 the 

Commission summarily may 

temporarily suspend the change in the 

rules of a self-regulatory organization 

(‘‘SRO’’) 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. As discussed below, the 

Commission believes a temporary 

suspension of the proposed rule change 

is necessary and appropriate to allow for 

additional analysis of the proposed rule 

change’s consistency with the Act and 

the rules thereunder. 

When exchanges file their proposed 

rule changes with the Commission, 

including fee filings like the Exchange’s 

present proposal, they are required to 

provide a statement supporting the 

proposal’s basis under the Act and the 

rules and regulations thereunder 

applicable to the exchange.11 The 

instructions to Form 19b–4, on which 

exchanges file their proposed rule 

changes, specify that such statement 

‘‘should be sufficiently detailed and 

specific to support a finding that the 

proposed rule change is consistent with 

[those] requirements.’’ 12

Section 6 of the Act, including 

Sections 6(b)(4), (5), and (8), require the 

rules of an exchange to: (1) Provide for 

the equitable allocation of reasonable 

fees among members, issuers, and other 

persons using the exchange’s 

facilities; 13 (2) perfect the mechanism of 

a free and open market and a national 

market system, protect investors and the 

public interest, and not be designed to 

permit unfair discrimination between 

customers, issuers, brokers, or 

dealers; 14 and (3) not impose any 

burden on competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.15

In justifying its proposal, the 

Exchange stated in its filing that its 

proposal is reasonable because it ‘‘is a 

reasonable attempt to increase liquidity 

on the Exchange and improve the 

Exchange’s market share relative to its 

competitors.’’ 16 The Exchange also 

states that the proposal is an equitable 

allocation of fees and credits because 

‘‘all ETP Holder that participate on the 


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Federal Register / Vol. 86, No. 152 / Wednesday, August 11, 2021 / Notices 44117 

17See id. at 35553. 

18See id. 

19See id. 

20See id. 

21See 15 U.S.C. 78f(b)(4), (5), and (8), 

respectively. 

22For purposes of temporarily suspending the 

proposed rule change, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

15 U.S.C. 78c(f). 

23 15 U.S.C. 78s(b)(3)(C). Once the Commission 

temporarily suspends a proposed rule change, 

Section 19(b)(3)(C) of the Act requires that the 

Commission institute proceedings under Section 

19(b)(2)(B) to determine whether a proposed rule 

change should be approved or disapproved. 

24 15 U.S.C. 78s(b)(2)(B). 

25 15 U.S.C. 78s(b)(2)(B). Section 19(b)(2)(B) of the 

Act also provides that proceedings to determine 

whether to disapprove a proposed rule change must 

be concluded within 180 days of the date of 

publication of notice of the filing of the proposed 

rule change. See id. The time for conclusion of the 

proceedings may be extended for up to 60 days if 

the Commission finds good cause for such 

extension and publishes its reasons for so finding, 

or if the exchange consents to the longer period. See 

id. 

26 15 U.S.C. 78f(b)(4). 

27 15 U.S.C. 78f(b)(5). 

28 15 U.S.C. 78f(b)(8). 

29 17 CFR 201.700(b)(3). 

30See id. 

31See id. 

32See 15 U.S.C. 78f(b)(4), (5), and (8). 

Exchange will be able to internalize 

their Retail Orders on the Exchange at 

no cost, i.e., they would not receive a 

credit or pay any fee for the execution 

of Retail Orders that are internalized.’’ 17

Further, the Exchange states that the 

proposal is an equitable allocation of 

fees and credits because it would benefit 

all investors by deepening the 

Exchange’s liquidity pool, supporting 

the quality of price discovery, 

promoting market transparency, and 

improving investor protection.18 The 

Exchange states that the proposal is not 

unfairly discriminatory because ETP 

Holders are free to transact on other 

exchanges if they believe those 

exchanges offer better value.19 Finally, 

the Exchange states that the proposal is 

not unfairly discriminatory because it is 

available to all ETP holders on an equal 

and non-discriminatory basis and that 

‘‘all similarly situated ETP Holders 

would be charged the same fee for 

executing Retail Orders that are 

internalized.’’ 20

In temporarily suspending the 

Exchange’s proposed rule change, the 

Commission intends to further consider 

whether the proposal to amend the 

NYSE Arca Fee Schedule is consistent 

with the statutory requirements 

applicable to a national securities 

exchange under the Act. In particular, 

the Commission will consider whether 

the proposed rule change satisfies the 

standards under the Act and the rules 

thereunder requiring, among other 

things, that an exchange’s rules provide 

for the equitable allocation of reasonable 

fees among members, issuers, and other 

persons using its facilities; not permit 

unfair discrimination between 

customers, issuers, brokers or dealers; 

and do not impose any burden on 

competition not necessary or 

appropriate in furtherance of the 

purposes of the Act.21

Therefore, the Commission finds that 

it is appropriate in the public interest, 

for the protection of investors, and 

otherwise in furtherance of the purposes 

of the Act, to temporarily suspend the 

proposed rule change.22

IV. Proceedings To Determine Whether 

To Approve or Disapprove the 

Proposed Rule Change 

In addition to temporarily suspending 

the proposal, the Commission also 

hereby institutes proceedings pursuant 

to Sections 19(b)(3)(C) 23 and 19(b)(2)(B) 

of the Act 24 to determine whether the 

Exchange’s proposed rule change 

should be approved or disapproved. 

Institution of proceedings does not 

indicate that the Commission has 

reached any conclusions with respect to 

any of the issues involved. Rather, the 

Commission seeks and encourages 

interested persons to provide additional 

comment on the proposed rule change 

to inform the Commission’s analysis of 

whether to approve or disapprove the 

proposed rule change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,25 the Commission is providing 

notice of the grounds for possible 

disapproval under consideration: 

• Whether the Exchange has 

demonstrated how its proposed fee is 

consistent with Section 6(b)(4) of the 

Act, which requires that the rules of a 

national securities exchange ‘‘provide 

for the equitable allocation of reasonable 

dues, fees, and other charges among its 

members and issuers and other persons 

using its facilities;’’ 26; 

• Whether the Exchange has 

demonstrated how its proposed fee is 

consistent with Section 6(b)(5) of the 

Act, which requires, among other 

things, that the rules of a national 

securities exchange not be ‘‘designed to 

permit unfair discrimination between 

customers, issuers, brokers, or 

dealers’’ 27; and 

• Whether the Exchange has 

demonstrated how its proposed fee is 

consistent with Section 6(b)(8) of the 

Act, which requires that the rules of a 

national securities exchange ‘‘not 

impose any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of [the Act].’’ 28

As noted above, the proposal purports 

to amend the NYSE Arca Fee Schedule 

to eliminate the credits for providing 

liquidity for certain internalized Retail 

Orders when such orders have an ADV 

of at least 150,000 shares. However, the 

Exchange’s statements in support of the 

proposed rule change lack specificity 

and are at times contradictory. For 

example, the Exchange provides only 

broad general statements that the 

proposal is not unfairly discriminatory 

because all ETP Holders will be treated 

the same. However, this explanation 

fails to address why it is not unfairly 

discriminatory for ETP Holders with 

under 150,000 ADV of internalized 

Retail Orders to continue to receive a 

credit for providing liquidity while 

those with over 150,000 ADV of 

internalized Retail Orders no longer 

receive the same credit. Furthermore, 

the Exchange contends that the proposal 

is consistent with the Act because it will 

incentivize more Retail Order flow to 

the Exchange, thereby benefitting all 

investors. However, the Exchange does 

not explain how a proposal to eliminate 

an existing credit would achieve these 

goals. 

Under the Commission’s Rules of 

Practice, the ‘‘burden to demonstrate 

that a proposed rule change is 

consistent with the [Act] and the rules 

and regulations issued thereunder . . . 

is on the [SRO] that proposed the rule 

change.’’ 29 The description of a 

proposed rule change, its purpose and 

operation, its effect, and a legal analysis 

of its consistency with applicable 

requirements must all be sufficiently 

detailed and specific to support an 

affirmative Commission finding,30 and 

any failure of an SRO to provide this 

information may result in the 

Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Act and the applicable rules 

and regulations.31

The Commission is instituting 

proceedings to allow for additional 

consideration and comment on the 

issues raised herein, including as to 

whether the proposed fees are 

consistent with the Act, and 

specifically, with its requirements that 

exchange fees be reasonable and 

equitably allocated, not be unfairly 

discriminatory, and not impose a 

burden on competition.32


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44118 Federal Register / Vol. 86, No. 152 / Wednesday, August 11, 2021 / Notices 

33 15 U.S.C. 78s(b)(2). Section 19(b)(2) of the Act 

grants the Commission flexibility to determine what 

type of proceeding—either oral or notice and 

opportunity for written comments—is appropriate 

for consideration of a particular proposal by an 

SRO. See Securities Acts Amendments of 1975, 

Report of the Senate Committee on Banking, 

Housing and Urban Affairs to Accompany S. 249, 

S. Rep. No. 75, 94th Cong., 1st Sess. 30 (1975). 

34 15 U.S.C. 78s(b)(3)(C). 

35 17 CFR 200.30–3(a)(57) and (58). 

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). 

5See Securities Exchange Act Release No. 92204, 

86 FR 33395 (June 24, 2021). The Commission 

designated August 8, 2021, as the date by which the 

Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

approve or disapprove, the proposed rule change. 

6 In Amendment No. 1, the Exchange: (1) Reduced 

the proposed position limit for GLD options from 

1,000,000 contracts to 500,000 contracts; and (2) 

provided additional justification and analysis in 

support of the proposal. The additional justification 

and analysis provided by Amendment No. 1 is 

included in the description below of the proposal 

as amended. The full text of Amendment No. 1 is 

available on the Commission’s website at: https:// 

www.sec.gov/comments/sr-cboe-2021-029/ 

srcboe2021029-9094584-246812.pdf. 

7 15 U.S.C. 78s(b)(2)(B). 

V. Commission’s Solicitation of 

Comments 

The Commission requests written 

views, data, and arguments with respect 

to the concerns identified above as well 

as any other relevant concerns. Such 

comments should be submitted by 

September 1, 2021. Rebuttal comments 

should be submitted by September 15, 

2021. Although there do not appear to 

be any issues relevant to approval or 

disapproval which would be facilitated 

by an oral presentation of views, data, 

and arguments, the Commission will 

consider, pursuant to Rule 19b–4, any 

request for an opportunity to make an 

oral presentation.33

The Commission asks that 

commenters address the sufficiency and 

merit of the Exchange’s statements in 

support of the proposal, in addition to 

any other comments they may wish to 

submit about the proposed rule change. 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the proposed rule 

changes, 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 No. SR– 

NYSEArca–2021–52 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 No. 

SR–NYSEArca–2021–52. The 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 such 

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 publicly available. All 

submissions should refer to File No. 

SR–NYSEArca–2021–52 and should be 

submitted on or before September 1, 

2021. Rebuttal comments should be 

submitted by September 15, 2021. 

VI. Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(3)(C) of the Act,34 that File 

No. SR–NYSEArca–2021–52, be and 

hereby is, temporarily suspended. In 

addition, the Commission is instituting 

proceedings to determine whether the 

proposed rule change should be 

approved or disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.35

Jill M. Peterson, 

Assistant Secretary. 

[FR Doc. 2021–17087 Filed 8–10–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92581; File No. SR–CBOE– 

2021–029] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing of 

Amendment No. 1 and Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change, as Modified by 

Amendment No. 1, To Increase 

Position Limits for Options on Certain 

Exchange-Traded Funds and an 

Exchange-Traded Note 

August 5, 2021. 

I. Introduction 

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 

amend Interpretation and Policy .07 of 

Exchange Rule 8.30, Position Limits, to 

increase the position limits for options 

on the following exchange traded funds 

(‘‘ETFs’’) and exchange traded note 

(‘‘ETN’’) (collectively, ‘‘Exchange 

Traded Products’’ or ‘‘ETP(s)’’): SPDR 

Gold Shares (‘‘GLD’’), iShares iBoxx $ 

Investment Grade Corporate Bond ETF 

(‘‘LQD’’), iShares Silver Trust (‘‘SLV’’), 

iPath S&P 500 VIX Short-Term Futures 

ETN (‘‘VXX’’), ProShares Ultra VIX 

Short-Term Futures ETF (‘‘UVXY’’), and 

VanEck Vectors Gold Miners ETF 

(‘‘GDX’’). The proposed rule change was 

published for comment in the Federal 

Register on May 10, 2021.3 On June 17, 

2021, pursuant to Section 19(b)(2) of the 

Act,4 the Commission designated a 

longer period within which to approve 

the proposed rule change, disapprove 

the proposed rule change, or institute 

proceedings to determine whether to 

approve or disapprove the proposed 

rule change.5 On July 27, 2021, the 

Exchange submitted Amendment No. 1 

to the proposed rule change, which 

replaced and superseded the proposed 

rule change as originally filed.6 The 

Commission is publishing this notice 

and order to solicit comments on the 

proposed rule change, as modified by 

Amendment No. 1, from interested 

persons and to institute proceedings 

pursuant to Section 19(b)(2)(B) of the 

Act 7 to determine whether to approve 

or disapprove the proposed rule change, 

as modified by Amendment No. 1. 

II. Description of the Proposal, as 

Modified by Amendment No. 1 

Currently, position limits for options 

on ETFs and ETNs traded on the 

Exchange, such as those subject to this 


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