51398 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 

2Although the Fund does not currently intend to 

issue preferred shares, the board may authorize the 

issuance of preferred shares in the future. 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 

Branch Chief, at (202) 551–6825 

(Division of Investment Management, 

Chief Counsel’s Office). 

SUPPLEMENTARY INFORMATION: The 

following is a summary of the 

application. The complete application 

may be obtained via the Commission’s 

website by searching for the file 

number, or for an applicant using the 

Company name box, at http://

www.sec.gov/search/search.htm, or by 

calling (202) 551–8090. 

Summary of the Application: 

1. Section 19(b) of the Act generally 

makes it unlawful for any registered 

investment company to make long-term 

capital gains distributions more than 

once every twelve months. Rule 19b–1 

under the Act limits to one the number 

of capital gain dividends, as defined in 

section 852(b)(3)(C) of the Internal 

Revenue Code of 1986 (‘‘Code,’’ and 

such dividends, ‘‘distributions’’), that a 

registered investment company may 

make with respect to any one taxable 

year, plus a supplemental distribution 

made pursuant to section 855 of the 

Code not exceeding 10% of the total 

amount distributed for the year, plus 

one additional capital gain dividend 

made in whole or in part to avoid the 

excise tax under section 4982 of the 

Code. 

2. Applicant believes that investors in 

certain closed-end funds may prefer an 

investment vehicle that provides regular 

current income through a fixed 

distribution policy (‘‘Distribution 

Policy’’). Applicant proposes that the 

Fund be permitted to adopt a 

Distribution Policy, pursuant to which 

the Fund would distribute periodically 

to its shareholders a fixed percentage of 

the market price of the Fund’s common 

shares at a particular point in time or a 

fixed percentage of net asset value 

(‘‘NAV’’) at a particular time or a fixed 

amount per share of common shares, 

any of which may be adjusted from time 

to time. 

3. Applicant requests an order under 

section 6(c) of the Act granting an 

exemption from section 19(b) of the Act 

and rule 19b–1 to permit a Fund to 

distribute periodic capital gain 

dividends (as defined in section 

852(b)(3)(C) of the Code) as frequently 

as twelve times in any one taxable year 

in respect of its common shares (and as 

often as specified by, or determined in 

accordance with the terms of, any 

preferred shares issued by the Fund).2

Section 6(c) of the Act provides, in 

relevant part, that the Commission may 

exempt any person or transaction from 

any provision of the Act to the extent 

that such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. 

4. Applicant states that any order 

granting the requested relief will be 

subject to the terms and conditions 

stated in the application, which 

generally are designed to address the 

concerns underlying section 19(b) and 

rule 19b–1, including concerns about 

proper disclosures and shareholders’ 

understanding of the source(s) of a 

Fund’s distributions and concerns about 

improper sales practices. Among other 

things, such terms and conditions 

require that (1) the board of trustees of 

the Fund (the ‘‘Board’’) request and 

evaluate, and the Fund will furnish, 

such information as may be reasonably 

necessary to make an informed 

determination of whether to adopt the 

proposed Distribution Policy and that 

the Board periodically review the 

amount of the distributions in light of 

the investment experience of the Fund, 

and (2) that the Fund’s shareholders 

receive appropriate disclosures 

concerning the distributions. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–19820 Filed 9–14–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92917; No. SR–NYSEArca– 

2021–79] 

Self-Regulatory Organizations; NYSE 

Arca, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Modify the NYSE Arca 

Options Fee Schedule 

September 9, 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 

September 1, 2021, NYSE Arca, Inc. 

(‘‘NYSE Arca’’ or the ‘‘Exchange’’) 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 selfregulatory organization. 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 

The Exchange proposes to modify the 

NYSE Arca Options Fee Schedule (‘‘Fee 

Schedule’’) regarding certain pricing 

incentives. The Exchange proposes to 

implement the fee change effective 

September 1, 2021. The proposed rule 

change is available on the Exchange’s 

website at www.nyse.com, at the 

principal office of the Exchange, 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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The purpose of this filing is to amend 

the Fee Schedule to modify certain 

pricing incentives. Specifically, the 

Exchange proposes to modify the 

‘‘Discount in Take Liquidity Fees for 

Professional Customer and NonCustomer Liquidity Removing Interest,’’ 

the ‘‘Market Maker Penny and SPY 

Posting Credit Tiers,’’ and the ‘‘Market 

Maker Incentive For Non-Penny Issues,’’ 

as described below. The Exchange 

proposes to implement the fee change 

effective September 1, 2021. 

Discount in Take Liquidity Fees for 

Professional Customers and NonCustomer Liquidity Removing Interest 

(the ‘‘Take Fee Discount’’) 

If an OTP Holder or OTP Firm 

(collectively ‘‘OTP Holders’’) executes a 

transaction that removes or ‘‘takes’’ 

liquidity on the Exchange, the OTP 

Holder is charged a ‘‘Take Liquidity’’ fee 

(referred to herein as ‘‘Take Fees’’) and 

such liquidity may be referred to as 

‘‘Liquidity Removing’’ or liquidity 


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4See Fee Schedule, NYSE Arca OPTIONS: 

TRADE-RELATED CHARGES FOR STANDARD 

OPTIONS, TRANSACTION FEE FOR ELECTRONIC 

EXECUTIONS—PER CONTRACT (setting forth a 

per contract Take Fee of $0.50 for such Penny 

executions in Professional Customer, Firm, Broker 

Dealer, and Market Maker range as compared to a 

per contract take fee of $0.49 for such Penny 

executions in the Customer range). 

5See Fee Schedule, Endnote 8 (providing that 

TCADV ‘‘includes OCC calculated Customer 

volume of all types, including Complex Order 

Transactions and QCC transactions, in equity and 

ETF options’’). 

6See, e.g., Fee Schedule, CUSTOMER PENNY 

POSTING CREDIT TIERS and Endnote 15 

(providing per contract credits to OTP Holders and 

Affiliates that meet certain minimum volume 

thresholds) and MARKET MAKER PENNY AND 

SPY POSTING CREDIT TIERS (same). 

7See, e.g., MIAX Pearl Options Fee Schedule, 

available at https://www.miaxoptions.com/sites/ 

default/files/fee_schedule-files/MIAX_Pearl_

Options_Fee_Schedule_08122021.pdf (providing a 

lower ‘‘take rate’’ for ‘‘executed MIAX Pearl Market 

Maker Orders when the executing buyer and seller 

are the same Member or Affiliates’’ and, a higher 

‘‘take rate’’ for ‘‘executed MIAX Pearl Market Maker 

Orders when the executing buyer and seller are not 

the same Member or Affiliates’’) (emphasis added); 

Nasdaq Options 7 Pricing Schedule, Section 2 

Nasdaq Options Market—Fees and Rebates, 

available at https://listingcenter.nasdaq.com/ 

rulebook/nasdaq/rules/nasdaq-options-7 (providing 

that Nasdaq participants that add 1.30% of 

Customer, Professional, Firm, Broker-Dealer or NonNOM Market Maker liquidity in Penny Symbols 

and/or Non-Penny Symbols of TCADV per day in 

a month will pay ‘‘a $0.48 per contract Penny 

Symbols Fee for Removing Liquidity when the 

Participant is (i) both the buyer and the seller or 

(ii) the Participant removes liquidity from another 

Participant under Common Ownership’’, otherwise 

such participants pay $0.50 per contract on such 

interest). 

8OTP Holder may (still) qualify for the Super Tier 

by executing at least 0.55% of TCADV from Market 

Maker posted interest in all issues. 

taking.4 To offset such costs and to 

encourage market participants to direct 

order flow to the Exchange, the 

Exchange offers, among other 

incentives, the Take Fee Discounts for 

executions in Penny Issues. 

The Exchange proposes to modify one 

of the Take Fee Discounts. Under the 

current Fee Schedule, OTP Holders that 

execute at least 0.80% of Total Industry 

Customer equity and ETF option 

average daily volume (‘‘TCADV’’) 5 from 

Customer posted interest in all issues, 

plus executed ADV of 0.30% ADV of 

U.S. Equity Market Share Posted and 

Executed on NYSE Arca Equity Market, 

may qualify for a $0.04 per contract 

Take Fee Discount on liquidity-taking 

executions by Professional Customers or 

Non-Customers in Penny Issues. 

The Exchange proposes that this $0.04 

Take Fee Discount would apply only if 

the executing buyer and seller in the 

qualifying transaction are either the 

same OTP Holder or an Affiliated or 

Appointed OFP or Appointed MM of 

the OTP Holder (collectively referred to 

as ‘‘Affiliates’’ herein), otherwise, the 

Take Fee Discount would be $0.03 

(instead of $0.04). In other words, when 

an OTP Holder or its Affiliate trades 

against itself (e.g., Firm 1 MM trades 

against Firm 1 Customer or Firm 1 MM 

trades against Customer of an Affiliate 

of Firm 1), the $0.04 Take Fee Discount 

would apply. If, however, the OTP 

Holder trades against another OTP 

Holder (e.g., Firm 1 MM trades against 

Firm 2 Customer), the $0.03 Take Fee 

Discount would apply. The Exchange 

proposes to add language to the Fee 

Schedule that adds this provision. 

The Exchange believes the proposed 

fee change is reasonable because the 

Exchange already offers certain 

transaction fee discounts to OTP 

Holders and their Affiliates that 

aggregate their order flow on these types 

of transactions.6 The Exchange also 

notes that this proposed change is being 

made for business and competitive 

reasons to align Exchange fee incentives 

with those charged by other options 

exchanges.7 The Exchange believes that 

it will still remain highly competitive 

and that its Take Fees Discounts, as 

modified, would continue to attract 

order flow to the Exchange. 

Market Maker Incentive for Non-Penny 

Issues and Market Maker Penny and 

SPY Posting Credit Tiers (the ‘‘Market 

Maker Posting Tiers’’) 

The Exchange also proposes to modify 

the criteria for Market Makers to qualify 

for enhanced posting credits in Penny 

Issues and SPY (i.e., the ‘‘Market Maker 

Posting Tiers’’). Specifically, to 

encourage Market Makers and Lead 

Market Makers (collectively, ‘‘Market 

Makers’’) to direct orders and quotes to 

the Exchange, this proposed rule change 

would modify one of the alternative 

qualification bases for achieving the 

Super Tier by lowering the minimum 

volume threshold and limiting which 

interest can qualify for that threshold. 

Currently, to qualify for the Super Tier, 

OTP Holders must execute at least 

1.60% of TCADV from all interest in all 

issues, all account types, with at least 

0.80% TCADV from posted interest in 

all issues. The Exchange proposes to 

modify this qualification bases such that 

to qualify, an OTP Holder would have 

to execute least 1.60% of TCADV from 

all interest in all issues, all account 

types (which would be unchanged), 

with at least 0.15% TCADV from Market 

Maker posted interest in all issues. The 

per contract credit for OTP Holders that 

achieve the Super Tier remains 

unchanged (i.e., $0.37, and $0.39 per 

contract credit, respectively, for 

electronic executions of Market Maker 

Posted Interest in Penny Issues 

excluding SPY and for such executions 

in SPY). 

The Exchange believes that the 

proposed change would continue to 

attract order flow to the Exchange 

because the limitation on the qualifying 

interest (from all posted interest to 

Market Maker posted interest) would be 

offset by the significantly reduced 

volume requirement (from 0.80% to 

0.15%). In addition, notwithstanding 

the proposed modification to the Super 

Tier, OTP Holders are still eligible to 

qualify for the existing alternative (and 

unchanged) Super Tier qualification 

basis for executions in Penny Issues and 

SPY.8 By continuing to provide such 

alternative methods to qualify for Take 

Fee Discounts, the Exchange believes 

the opportunities to qualify for credits is 

increased, which benefits all 

participants through increased volume 

to the Exchange. 

Market Maker Incentive for Non-Penny 

Issues (the ‘‘Market Maker Non-Penny 

Incentive’’) 

To mirror the proposed change to the 

Super Tier (of the Market Maker Posting 

Tiers) the Exchange also proposes to 

modify one of the alternative 

qualification bases to achieve the 

Market Maker Non-Penny Incentive. 

Specifically, under the current Fee 

Schedule, OTP Holders must execute at 

least 1.60% of TCADV from all orders 

in all issues, all account types, with at 

least 0.80% TCADV from posted interest 

in all issues. First, the Exchange 

proposes to replace reference to 

‘‘TCADV from all orders’’ with ‘‘TCADV 

from all interest’’ to make clear that 

liquidity may include orders or quotes. 

Next, the Exchange proposes to modify 

this qualification bases such that 

(identical to the proposed change to the 

Super Tier), to qualify, an OTP Holder 

would have to execute least 1.60% of 

TCADV from all interest in all issues, all 

account types, with at least 0.15% 

TCADV from Market Maker posted 

interest in all issues. The $0.55 per 

contract credit for OTP Holders that 

achieve the minimum volume threshold 

remains unchanged. 

The Exchange believes that the 

proposed change would continue to 

attract order flow to the Exchange 

because the limitation on the qualifying 

interest (from all posted interest to 

Market Maker posted interest) is offset 

by the significantly reduced volume 

requirement (from 0.80% to 0.15%). In 

addition, notwithstanding this proposed 

modification, OTP Holders are still 

eligible to qualify for the existing 

alternative (and unchanged) Market 


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51400 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 

9OTP Holder may (still) qualify for the Market 

Maker Posting Incentive by executing at least 0.55% 

of TCADV from Market Maker posted interest in all 

issues. 

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

11 15 U.S.C. 78f(b)(4) and (5). 

12See Securities Exchange Act Release No. 51808 

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

(S7–10–04) (‘‘Reg NMS Adopting Release’’). 

13The OCC publishes options and futures volume 

in a variety of formats, including daily and monthly 

volume by exchange, available here: https://

www.theocc.com/Market-Data/Market-DataReports/Volume-and-Open-Interest/MonthlyWeekly-Volume-Statistics. 

14Based on OCC data for monthly volume of 

equity-based options and monthly volume of ETFbased options, see id., the Exchange’s market share 

in equity-based options increased from 10.71% for 

the month of July 2020 to 12.15% for the month of 

July 2021. 

15See supra note 6. 

16See supra note 7. 

17See supra notes 8 and 9. 

Maker Non-Penny Incentive 

qualification basis for executions in 

Non-Penny Issues.9 By continuing to 

provide such alternative methods to 

qualify for Take Fee Discounts, the 

Exchange believes the opportunities to 

qualify for credits is increased, which 

benefits all participants through 

increased volume to the Exchange. 

The Exchange cannot predict with 

certainty whether any OTP Holders will 

avail themselves of the proposed 

changes to the Take Fee Discount, the 

Market Maker Posting Tiers, or Market 

Maker Non-Penny Incentive. At present, 

whether or when an OTP Holder would 

qualify for the enhanced credit varies 

month-to-month. Thus, the Exchange 

cannot predict with any certainty the 

number of OTP Holders that may 

qualify for the proposed new 

qualifications, but believes that OTP 

Holders (including those acting as 

Market Makers) would be encouraged to 

increase volume to take advantage of the 

available credits and discounts. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act,10 in general, and 

furthers the objectives of Sections 

6(b)(4) and (5) of the Act,11 in particular, 

because it provides for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members, 

issuers and other persons using its 

facilities and does not unfairly 

discriminate between customers, 

issuers, brokers, or dealers. 

The Proposed Rule Change Is 

Reasonable 

The Exchange operates in a highly 

competitive market. The Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. 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.’’ 12

There are currently 16 registered 

options exchanges competing for order 

flow. Based on publicly-available 

information, and excluding index-based 

options, no single exchange has more 

than 16% of the market share of 

executed volume of multiply-listed 

equity and ETF options trades.13

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity & 

ETF options order flow. More 

specifically, in July of 2021, the 

Exchange had less than 13% market 

share of executed volume of multiplylisted equity & ETF options trades.14

The Exchange believes that the evershifting market share among the 

exchanges from month to month 

demonstrates that market participants 

can shift order flow or discontinue or 

reduce use of certain categories of 

products, in response to fee changes. 

Accordingly, competitive forces 

constrain options exchange transaction 

fees. In response to this competitive 

environment, the Exchange has 

established incentives, such as the Take 

Fee Discount, Market Maker Non-Penny 

Incentive, and Market Maker Posting 

Tiers. 

Finally, the Exchange believes the 

proposed non-substantive change to the 

Fee Schedule (i.e., replacing reference to 

‘‘orders’’ with ‘‘interest’’ in the Market 

Maker Non-Penny Incentive) is 

reasonable, equitable, and not unfairly 

discriminatory because the change 

would add clarity, transparency and 

internal consistency to the Fee Schedule 

making it easier to navigate and 

comprehend, which would benefit all 

market participants. 

The Take Fee Discount 

The Exchange believes that the 

proposed modification to the Take Fee 

Discount to encourage OTP Holders to 

send both sides of a transaction to the 

Exchange is reasonably designed to 

continue to incent OTP Holders to 

increase the amount of interest sent to 

the Exchange, especially liquiditytaking interest. The Exchange believes 

the proposed fee change is reasonable 

because the Exchange already offers 

certain transaction fee discounts to OTP 

Holders and their Affiliates that 

aggregate their order flow on these types 

of transactions.15 The Exchange also 

notes that this proposed change is being 

made for business and competitive 

reasons to align Exchange fee incentives 

with those charged by other options 

exchanges.16 The Exchange believes 

that, notwithstanding the proposed 

change, it will still remain highly 

competitive and would continue to 

attract order flow to the Exchange. 

The Market Maker Posting Tiers and 

Market Maker Non-Penny Incentive 

The Exchange believes that the 

proposed (identical) change to the 

Market Maker Posting Tiers and Market 

Maker Non-Penny Incentive would 

continue to attract order flow to the 

Exchange because the limitation on the 

qualifying interest (from all posted 

interest to Market Maker posted interest) 

is offset by the significantly reduced 

volume requirement (from 0.80% to 

0.15%). In addition, notwithstanding 

this proposed modification, the 

Exchange notes that OTP Holders are 

still eligible to qualify for the existing 

alternative (and unchanged) 

qualification basis in each of the Market 

Maker Posting Tiers and Market Maker 

Non-Penny Incentive for eligible 

executions.17 By continuing to provide 

such alternative methods to qualify for 

the Market Maker Posting Tiers and 

Market Maker Non-Penny Incentive, the 

Exchange believes the opportunities to 

qualify for credits is increased, which 

benefits all participants through 

increased volume to the Exchange. 

Finally, the proposed modification to 

the Market Maker Posting Tiers and 

Market Maker Non-Penny Incentive is 

designed to incent OTP Holders to 

transact more Market Maker volume on 

the Exchange, which may result in an 

increase of volume and liquidity for all 

market participants by providing more 

trading opportunities and tighter 

spreads, and may lead to a 

corresponding increase in order flow 

from other market participants. 

To the extent the proposed rule 

change continues to attract greater 

volume and liquidity, by encouraging 

OTP Holders (and their affiliates) to 

increase their options volume on the 

Exchange in an effort to achieve higher 

credits, the Exchange believes the 

proposed change would improve the 

Exchange’s overall competitiveness and 

strengthen its market quality for all 

market participants. In the backdrop of 

the competitive environment in which 

the Exchange operates, the proposed 

rule changes are a reasonable attempt by 


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18See supra note 7. 

19See Reg NMS Adopting Release, supra note 12, 

at 37499. 

20See supra note 13. 

21Based on OCC data for monthly volume of 

equity-based options and monthly volume of ETFbased options, see id., the Exchange’s market share 

in equity-based options increased from 10.71% for 

the month of July 2020 to 12.15% for the month of 

July 2021. 

22See supra note 7. 

the Exchange to increase the depth of its 

market and improve its market share 

relative to its competitors. 

The Proposed Rule Change Is an 

Equitable Allocation of Credits and Fees 

The Exchange believes the proposed 

rule change is an equitable allocation of 

its fees and credits. The proposal is 

based on the amount and type of 

business transacted on the Exchange 

and OTP Holders can opt to avail 

themselves of the credits and discounts 

or not. Moreover, the proposal is 

designed to incent OTP Holders to 

aggregate all liquidity-taking interest at 

the Exchange as a primary execution 

venue and to continue to attract Market 

Maker posting interest on the Exchange. 

To the extent that the proposed change 

attracts more opportunities for 

execution of Customer and Market 

Maker posted interest on the Exchange, 

this increased order flow would 

continue to make the Exchange a more 

competitive venue for order execution. 

Thus, the Exchange believes the 

proposed rule change would improve 

market quality for all market 

participants on the Exchange and, as a 

consequence, attract more order flow to 

the Exchange thereby improving marketwide quality and price discovery. 

The Proposed Rule Change Is Not 

Unfairly Discriminatory 

The Exchange believes it is not 

unfairly discriminatory to modify the 

Take Fee Discount because the proposed 

modification would align Exchange fees 

with similar fees on other options 

markets 18 and would be available to all 

similarly-situated market participants 

on an equal and non-discriminatory 

basis. The Exchange believes the 

proposed changes are not unfairly 

discriminatory because the discounts 

and credits are available to all similarlysituated market participants on an equal 

and non-discriminatory basis. 

The proposals are based on the 

amount and type of business transacted 

on the Exchange and OTP Holders are 

not obligated to try to achieve the 

enhanced qualifications, nor are they 

obligated to execute liquidity-taking 

interest or posted interest. To the extent 

that the proposed change attracts more 

interest, including liquidity-taking and 

Market Maker posting interest, to the 

Exchange, this increased order flow 

would continue to make the Exchange a 

more competitive venue for order 

execution. Thus, the Exchange believes 

the proposed rule change would 

improve market quality for all market 

participants on the Exchange and, as a 

consequence, attract more order flow to 

the Exchange thereby improving marketwide quality and price discovery. The 

resulting increased volume and 

liquidity would provide more trading 

opportunities and tighter spreads to all 

market participants and thus would 

promote just and equitable principles of 

trade, 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. 

Finally, the Exchange believes that it 

is subject to significant competitive 

forces, as described below in the 

Exchange’s statement regarding the 

burden on competition. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

In accordance with Section 6(b)(8) of 

the Act, the Exchange does not believe 

that the proposed rule change would 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

Instead, as discussed above, the 

Exchange believes that the proposed 

changes would encourage the 

submission of additional liquidity to a 

public exchange, thereby promoting 

market depth, price discovery and 

transparency and enhancing order 

execution opportunities for all market 

participants. As a result, the Exchange 

believes that the proposed change 

furthers the Commission’s goal in 

adopting Regulation NMS of fostering 

integrated competition among orders, 

which promotes ‘‘more efficient pricing 

of individual stocks for all types of 

orders, large and small.’’ 19

Intramarket Competition. The 

proposed change is designed to attract 

additional order flow to the Exchange, 

including take-liquidity interest and 

Market Maker posting interest. The 

Exchange believes that the proposed 

modifications would incent OTP 

Holders to direct their liquidity-taking 

and Market Maker order flow to the 

Exchange. Greater liquidity benefits all 

market participants on the Exchange 

and increased liquidity-taking order 

flow and posted Market Maker interest 

would increase opportunities for 

execution of other trading interest. The 

proposed modifications would be 

available to all similarly-situated market 

participants and, as such, the proposed 

change would not impose a disparate 

burden on competition among market 

participants on the Exchange. 

Intermarket Competition. The 

Exchange operates in a highly 

competitive market in which market 

participants can readily favor one of the 

16 competing option exchanges if they 

deem fee levels at a particular venue to 

be excessive. In such an environment, 

the Exchange must continually adjust its 

fees to remain competitive with other 

exchanges and to attract order flow to 

the Exchange. Based on publiclyavailable information, and excluding 

index-based options, no single exchange 

has more than 16% of the market share 

of executed volume of multiply-listed 

equity and ETF options trades.20

Therefore, currently no exchange 

possesses significant pricing power in 

the execution of multiply-listed equity & 

ETF options order flow. More 

specifically, in July 2021, the Exchange 

had less than 13% market share of 

executed volume of multiply-listed 

equity & ETF options trades.21

The Exchange believes that the 

proposed rule change reflects this 

competitive environment because it 

modifies the Exchange’s fees in a 

manner designed to incent OTP Holders 

to direct trading interest (particularly 

both sides of a transaction and Market 

Maker interest) to the Exchange, to 

provide liquidity and to attract order 

flow, which would align Exchange fee 

incentives with those charged by other 

options exchanges.22 To the extent that 

this purpose is achieved, all the 

Exchange’s market participants should 

benefit from the improved market 

quality and increased opportunities for 

price improvement. 

The Exchange believes that the 

proposed change could promote 

competition between the Exchange and 

other execution venues, including those 

that currently offer similar discounts for 

sending both sides of a transaction, by 

encouraging additional orders to be sent 

to the Exchange for execution. 

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 

The foregoing rule change is effective 

upon filing pursuant to Section 


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23 15 U.S.C. 78s(b)(3)(A). 

24 17 CFR 240.19b–4(f)(2). 

25 15 U.S.C. 78s(b)(2)(B). 

26 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5The Arca early trading session begins at 4:00 

a.m. Eastern Time. 

6The term ‘‘Early Trading Session’’ shall mean 

the time between 4:00 a.m. and 8:00 a.m. Eastern 

Time. See EDGX Rule 1.5(ii). 

7The term ‘‘Pre-Opening Session’’ shall mean the 

time between 8:00 a.m. and 9:30 a.m. Eastern Time. 

See EDGX Rule 1.5(s). 

8The term ‘‘Regular Trading Hours’’ shall mean 

the time between 9:30 a.m. and 4:00 p.m. Eastern 

Time. See EDGX Rule 1.5(y). 

19(b)(3)(A) 23 of the Act and 

subparagraph (f)(2) of Rule 19b–4 24

thereunder, because it establishes a due, 

fee, or other charge imposed by the 

Exchange. 

At any time within 60 days of the 

filing of such 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 shall institute proceedings 

under Section 19(b)(2)(B) 25 of the Act 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– 

NYSEArca–2021–79 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–2021–79. 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–2021–79, and 

should be submitted on or before 

October 6, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–19862 Filed 9–14–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92914; File No. SR– 

CboeEDGX–2021–037] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend 

EDGX Rule 11.1(a)(1) To Begin 

Accepting Orders at 2:30 a.m. Eastern 

Time 

September 9, 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 

31, 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 and II below, which Items have 

been prepared by the Exchange. The 

Exchange filed the proposal as a ‘‘noncontroversial’’ proposed rule change 

pursuant to Section 19(b)(3)(A)(iii) of 

the Act 3 and Rule 19b–4(f)(6) 

thereunder.4 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’’) proposes to 

amend EDGX Rule 11.1(a)(1) to begin 

accepting orders at 2:30 a.m. Eastern 

Time. 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/), 

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 

EDGX Rule 11.1 (Hours of Trading and 

Trading Days) to begin accepting orders 

at 2:30 a.m. Eastern Time rather than 

3:30 a.m. Eastern Time. The proposal is 

substantially similar to NYSE Arca, LLC 

(‘‘Arca’’) Rule 7.34–E(a)(1) that provides 

Arca may accept orders 90 minutes 

before its early trading session begins.5

Currently EDGX Rule 11.1(a)(1) 

provides that orders may be entered into 

the System from 3:30 a.m. until 8:00 

p.m. Eastern Time. The rule provides 

that orders entered between 3:30 a.m. 

and 4:00 a.m. Eastern Time are not 

eligible for execution until the start of 

the Early Trading Session,6 Pre-Opening 

Session 7 or Regular Trading Hours,8

depending on the time in force selected 


khammond on DSKJM1Z7X2PROD with NOTICES