Federal Register / Vol. 86, No. 153 / Thursday, August 12, 2021 / Notices 44421 

47 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3See Cboe Global Markets, U.S. Equities Market 

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

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

market_statistics/. 

4Fee code ‘BB’ is appended to orders that remove 

liquidity from EDGX (Tape B) and is assessed a fee 

of $0.00285 per share. 

5Fee code ‘N’ is appended to orders that remove 

liquidity from EDGX (Tape C) and is assessed a fee 

of $0.00285 per share. 

6Fee code ‘W’ is appended to orders that remove 

liquidity from EDGX (Tape A) and is assessed a fee 

of $0.00285 per share. 

7ADAV means average daily added volume 

calculated as the number of shares added per day. 

ADAV is calculated on a monthly basis. 

8TCV 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. 

9Fee code ‘B’ is appended to orders that add 

liquidity to EDGX (Tape B) and is provided a rebate 

of $0.0016 per share. 

10Fee code ‘V’ is appended to orders that add 

liquidity to EDGX (Tape A) and is provided a rebate 

of $0.0016 per share. 

11Fee code ‘Y’ is appended to orders that add 

liquidity to EDGX (Tape C) and is provided a rebate 

of $0.0016 per share. 

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–2021–041, and 

should be submitted on or before 

September 2, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.47

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–17175 Filed 8–11–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92593; File No. SR– 

CboeEDGX–2021–036] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule 

August 6, 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 August 

2, 2021, Cboe EDGX Exchange, Inc. (the 

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

‘‘Exchange’’ or ‘‘EDGX’’ or ‘‘EDGX 

Equities’’) proposes to amend its Fee 

Schedule. The text of the proposed rule 

change is provided in Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

options/regulation/rule_filings/edgx/) 

[sic], 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 applicable to its equities 

trading platform (‘‘EDGX Equities’’) to 

modify the fee associated with Remove 

Volume Tier 2. 

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,3 no single 

registered equities exchange has more 

than 17% 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 

rebates 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. 

Currently, for orders in securities priced 

at or above $1.00, the Exchange 

provides a standard rebate of $0.00160 

per share for orders that add liquidity 

and assesses a fee of $0.00285 per share 

for orders that remove liquidity. For 

orders in securities priced below $1.00, 

the Exchange provides a standard rebate 

of $0.00009 per share for orders that add 

liquidity and assesses a fee of 0.30% of 

total dollar value 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. 

Pursuant to footnote 1 of the Fee 

Schedule, the Exchange currently offers 

Remove Volume Tiers that provide 

Members an opportunity to receive a 

reduced fee from the standard fee 

assessed for liquidity removing orders 

that yield fee codes BB,4 N,5 and W.6

The Remove Volume Tiers offer two 

different tiers that vary in criteria 

difficulty and incentive opportunities 

which Members may qualify for reduced 

fees for such orders. For example, the 

Remove Volume Tier 2 currently 

provides a reduced fee of $.00270 for 

Members who have either (1) an ADAV 7

greater than or equal to 0.25% of the 

TCV 8 with displayed orders that yield 

fee codes B,9 V 10 or Y; 11 or (2) Retail 


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44422 Federal Register / Vol. 86, No. 153 / Thursday, August 12, 2021 / Notices 

12ADV means average daily volume calculated as 

the number of shares added to, removed from, or 

routed by, the Exchange, or any combination or 

subset thereof, per day. ADV is calculated on a 

monthly basis. 

13Fee code ‘ZA’ is appended to Retail Orders that 

add liquidity to EDGX and is provided a rebate of 

$0.0032 per share. 

14 15 U.S.C. 78f. 

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

16 15 U.S.C. 78f(b)(5). 17Supra note 4. 

Order ADV 12 (i.e., yielding fee code 

ZA 13) greater than or equal to 0.45% of 

the TCV. The Exchange now proposes to 

increase the reduced fee to $0.00275 

provided under the Remove Volume 

Tier 2. The Exchange notes that the 

Remove Volume Tier 2, as modified, 

continues to be available to all Members 

and provides Members an opportunity 

to receive a reduced fee, albeit less of a 

reduced fee than currently offered. 

Further, the Remove Volume Tier 2 

continues to be designed to encourage 

Members to increase their order flow on 

the Exchange which further contributes 

to a deeper, more liquid market and 

provides even more execution 

opportunities for active market 

participants at improved prices. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,14

in general, and furthers the objectives of 

Section 6(b)(4),15 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its Members 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) 16 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 to the Remove 

Volume Tier 2 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 

Members. In particular, the Exchange 

believes the proposed fee change for 

Remove Volume Tier 2 is reasonable 

because the tier will continue to be 

available to all Members and provide all 

Members with an additional 

opportunity to receive a reduced fee. 

The Exchange further believes Remove 

Volume Tier 2 is a reasonable means to 

encourage growth in Members’ overall 

order flow to the Exchange and to 

incentivize Members to continue to 

provide liquidity adding and liquidity 

removing on the Exchange by offering 

them an opportunity to receive a 

reduced fee on qualifying orders. The 

Exchange believes that the proposed tier 

will generally benefit all market 

participants by incentivizing continuous 

liquidity and thus, deeper more liquid 

markets as well as increased execution 

opportunities. This overall increase in 

activity deepens the Exchange’s 

liquidity pool, offers additional cost 

savings, supports the quality of price 

discovery, promotes market 

transparency and improves market 

quality, for all investors. 

Further, the Exchange believes that 

the amended Remove Volume Tier 2 is 

reasonable as it does not represent a 

significant departure from the criteria or 

corresponding rates currently offered in 

the Fee Schedule, and that the proposed 

reduced fee is commensurate with the 

criteria. The Exchange also believes that 

the proposal represents an equitable 

allocation of fees and rebates and is not 

unfairly discriminatory because all 

Members are and will continue to be 

eligible for Remove Volume Tiers and 

have the opportunity to meet the tiers’ 

criteria and receive the applicable 

reduced fee if such criteria is met. The 

Exchange also notes that amended tier 

will not adversely impact any Member’s 

ability to qualify for reduced fees or 

enhanced rebate offered under other 

tiers. Should a Member not meet the 

proposed new criteria, the Member will 

merely not receive that corresponding 

reduced fee. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule changes will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. Rather, as 

discussed above, the Exchange believes 

that the proposed amendment to the 

Remove Volume Tier 2 would 

encourage the submission of additional 

order flow to a public exchange, thereby 

promoting market depth, execution 

incentives and enhanced execution 

opportunities, as well as price discovery 

and transparency for all Members. As a 

result, the Exchange believes that the 

proposed change furthers the 

Commission’s goal in adopting 

Regulation NMS of fostering 

competition among orders, which 

promotes ‘‘more efficient pricing of 

individual stocks for all types of orders, 

large and small.’’ 

The Exchange believes the proposed 

rule change does not impose any burden 

on intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. Particularly, 

the Remove Volume Tiers will continue 

to apply to all Members equally in that 

all Members are eligible for these tiers, 

have a reasonable opportunity to meet 

the tiers’ criteria and will receive the 

reduced fee on their qualifying orders if 

such criteria is met. Additionally, the 

Remove Volume Tiers are designed to 

attract additional order flow to the 

Exchange. Greater overall order flow, 

trading opportunities, and pricing 

transparency benefits all market 

participants on the Exchange by 

enhancing market quality and 

continuing to encourage Members to 

send orders, thereby contributing 

towards a robust and well-balanced 

market ecosystem. 

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. 

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 

small percentage of the overall market. 

Based on publicly available information, 

no single equities exchange has more 

than 17% of the market share.17

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 


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Federal Register / Vol. 86, No. 153 / Thursday, August 12, 2021 / Notices 44423 

18See Securities Exchange Act Release No. 51808 

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

19NetCoalition v. SEC, 615 F.3d 525, 539 (DC Cir. 

2010) (quoting Securities Exchange Act Release No. 

59039 (December 2, 2008), 73 FR 74770, 74782–83 

(December 9, 2008) (SR–NYSEArca–2006–21)). 

20 15 U.S.C. 78s(b)(3)(A). 

21 17 CFR 240.19b–4(f). 22 17 CFR 200.30–3(a)(12). 

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.’’ 18 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’. . . .’’.19 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 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 20 and paragraph (f) of Rule 

19b–4 21 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– 

CboeEDGX–2021–036 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–CboeEDGX–2021–036. 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–CboeEDGX–2021–036 and 

should be submitted on or before 

September 2, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–17178 Filed 8–11–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[SEC File No. 270–659, OMB Control No. 

3235–0723] 

Proposed Collection; Comment 

Request 

Upon Written Request Copies Available 

From: Securities and Exchange 

Commission, Office of FOIA Services, 

100 F Street NE, Washington, DC 

20549–2736 

Extension: 

Form 1–Z 

Notice is hereby given that, pursuant 

to the Paperwork Reduction Act of 1995 

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

and Exchange Commission 

(‘‘Commission’’) is soliciting comments 

on the collection of information 

summarized below. The Commission 

plans to submit this existing collection 

of information to the Office of 

Management and Budget for extension 

and approval. 

Form 1–Z (17 CFR 239.94) is used to 

report terminated or completed offerings 

or to suspend the duty to file ongoing 

reports under Regulation A, an 

exemption from registration under the 

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

seq.). The purpose of the Form 1–Z is 

to collect empirical data for the 

Commission on offerings conducted 

under Regulation A that have 

terminated or completed, to indicate to 

the Commission that issuers that have 

conducted Tier 2 offering are 

suspending their duty to file reports 

under Regulation A and to provide such 

information to the investing public. We 

estimate that approximately 17 issuers 

file Form 1–Z annually. We estimate 

that Form 1–Z takes approximately 1.5 

hours to prepare. We estimate that 

100% of the 1.5 hours per response is 

prepared by the company for a total 

annual burden of 26 hours (1.5 hours 

per response × 17 responses). 

Written comments are invited on: (a) 

Whether this proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 


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