Federal Register / Vol. 87, No. 92 / Thursday, May 12, 2022 / Notices 29201 

23See supra note 11. 

24See supra note 17. 

25NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

83 (December 9, 2008) (SR–NYSE–2006–21)). 

26 15 U.S.C. 78s(b)(3)(A)(ii). 

27 17 CFR 240.19b–4(f)(2). 

28 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

and to encourage additional order flow 

to the Exchange through a volume-based 

incentive that is comparable to volumebased incentives adopted by other 

exchanges and the Exchange.23

Accordingly, the Exchange believes the 

proposal would not burden, but rather 

promote, intermarket competition by 

enabling it to better compete with other 

exchanges that offer similar pricing 

incentives to market participants that 

achieve certain volume criteria and 

thresholds. 

Additionally, 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.’’ 24 The 

fact that this market is competitive has 

also long been recognized by the courts. 

In NetCoalition v. SEC, 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’ . . . .’’.25 Accordingly, the 

Exchange does not believe its proposed 

pricing changes impose 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)(ii) of the Act 26 and Rule 

19b–4(f)(2) 27 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 shall 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– 

MEMX–2022–11 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–MEMX–2022–11. 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–MEMX–2022–11 and 

should be submitted on or before June 

2, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10148 Filed 5–11–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94862; File No. SR– 

CboeBYX–2022–016] 

Self-Regulatory Organizations; Cboe 

BYX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule 

May 6, 2022. 

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

Securities Exchange Act of 1934 

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on May 2, 

2022, Cboe BYX Exchange, Inc. 

(‘‘Exchange’’ or ‘‘BYX’’) filed with the 

Securities and Exchange Commission 

(‘‘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 BYX Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘BYX’’ or ‘‘BYX 

Equities’’) is filing with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend its Fee Schedule. The text of 


khammond on DSKJM1Z7X2PROD with NOTICES
29202 Federal Register / Vol. 87, No. 92 / Thursday, May 12, 2022 / Notices 

3See Securities Exchange Act Release No. 91423 

(March 26, 2021) 86 FR 17230 (April 1, 2021) (SR– 

CboeBYX–2020–021). 

4The Exchange initially filed the proposed fee 

changes on April 14, 2022 (SR–CboeBYX–2022– 

012). On April 27, 2022, the Exchange withdrew 

that filing and re-submitted the proposed fee 

changes (SR–CboeBYX–2022–014). On April 29, 

2022, the Exchange withdrew that filing and resubmitted the proposed fee changes (SR–CboeBYX– 

2022–015). On May 2, 2022, the Exchange withdrew 

that filing and submitted this filing. 

5As discussed more fully below, the Exchange is 

also proposing to add footnotes 1 and 2 to fee code, 

AD. 

6 ‘‘Continuous Book Orders’’, as defined in Rule 

11.25(a)(2), may be displayed or non-displayed 

orders. Continuous Book Orders will not initiate a 

Periodic Auction but are eligible to participate in 

such an auction when it is executed. 

7A ‘‘Periodic Auction Only Order’’ is a nondisplayed limit order entered with an instruction to 

participate solely in Periodic Auctions pursuant to 

this Rule 11.25. Periodic Auction Only Orders are 

not eligible for execution on the Continuous Book. 

See Exchange Rule 11.25(b)(1). 

8A ‘‘Periodic Auction Eligible Order’’ is a nondisplayed limit order eligible to trade on the 

Continuous Book that is entered with an instruction 

to also initiate a Periodic Auction, if possible, 

pursuant to this Rule 11.25. See Exchange Rule 

11.25(b)(2) 

9A ‘‘Continuous Book Order’’ is an order on the 

BYX Book that is not a Periodic Auction Order. See 

Exchange Rule 11.25(a)(2). 

10Footnote 15 of the BYX Fee Schedule provides 

that ‘‘[f]or securities priced below $1.00: no charge 

or rebate’’ is applied. Therefore, the Exchange 

proposes to apply footnote 15 to proposed fee code 

AD. 

11Fee code ‘‘B’’ is appended to displayed orders 

adding liquidity to BYX (Tape B). 

12Fee code ‘‘V’’ is appended to displayed orders 

adding liquidity to BYX (Tape A). 

13Fee code ‘‘Y’’ is appended to displayed orders 

adding liquidity to BYX (Tape C). 

14The Exchange proposes to apply footnote 15 to 

proposed fee code AU. 

15The Exchange proposes to apply footnote 15 to 

proposed fee code AH. 

16Fee code ‘‘MM’’ is appended to non-displayed 

orders that add liquidity using a midpoint peg. 

the proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

equities/regulation/rule_filings/byx/), 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 

On March 26, 2021, the Commission 

approved the Exchange’s proposed 

introduction of periodic auctions in U.S. 

equity securities (‘‘Periodic Auctions’’).3

Periodic Auctions, which will launch 

on the Exchange on April 14, 2022, will 

be conducted throughout the course of 

the trading day when there are matching 

buy and sell Periodic Auction orders 

that are available to trade in such an 

auction. They are price forming auctions 

that are executed at the price level that 

maximizes the total number of shares in 

both the auction book and the 

continuous book and are designed to 

enhance the ability for investors to 

source liquidity in all equity securities 

traded on the Exchange. The Exchange 

now proposes to introduce fees 

associated with orders executed in 

Periodic Auctions.4

The Exchange operates a ‘‘TakerMaker’’ model whereby it pays credits 

to members that remove liquidity and 

assesses fees to those that add liquidity. 

The Exchange’s Fees Schedule sets forth 

the standard rebates and rates applied 

per share for orders that remove and 

provide liquidity, respectively. 

Particularly, for securities at or above 

$1.00, the Exchange provides a standard 

rebate of $0.00200 per share for orders 

that remove liquidity and assesses a fee 

of $0.00200 per share for orders that add 

liquidity. For orders priced below $1.00, 

the Exchange does not assess a fee or 

provide a rebate for orders that add 

liquidity and assesses a fee of 0.10% 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. 

Proposed Fee Codes 

The Exchange proposes to introduce 

three new fee codes applicable to orders 

executed in a Periodic Auction. First, 

the Exchange proposes to adopt fee code 

AD,5 which would be appended to 

displayed orders executed in a Periodic 

Auction.6 Periodic Auction Only 

Orders 7 or Periodic Auction Eligible 

Orders 8 are non-displayed orders and 

therefore fee code AD would not be 

appended to such orders. However, 

Continuous Book Orders 9 may be 

displayed or non-displayed orders and 

therefore such displayed Continuous 

Book Orders would be appended with 

fee code AD. Orders appended with fee 

code AD would be assessed a fee of 

$0.00200 in securities priced equal to or 

greater than $1.00, and would be 

provided no charge or rebate in 

securities priced less than $1.00.10 The 

proposed fee is the same as other 

displayed fee codes that add liquidity to 

the Exchange, such as fee codes B,11

V,12 and Y.13

Second, the Exchange proposes to 

adopt fee code AU, which would be 

appended to Periodic Auction Only or 

Periodic Auction Eligible orders 

executed in a Periodic Auction. Orders 

appended with fee code AU would not 

be provided a rebate or assessed a fee, 

regardless of the price of the security.14

Third, the Exchange proposes to 

adopt fee AH, which would be 

appended to non-displayed orders 

executed in a Periodic Auction. As 

noted above, Continuous Book Orders 

may be displayed or non-displayed 

orders. Therefore, non-displayed orders 

that are not Periodic Auction Only or 

Periodic Auction Eligible Orders would 

be appended with fee code AH. Orders 

appended with fee code AH would be 

assessed a fee of $0.00100 in securities 

priced equal to or greater than $1.00 and 

would be provided no charge or rebate 

in securities priced less than $1.00.15

The proposed fee is the same as the fee 

assessed to non-displayed midpoint peg 

orders (i.e., fee code MM).16

Proposed Definitions 

The Exchange proposes to adopt two 

new definitions pertaining to auction 

volume executed on the Exchange. First, 

the Exchange proposes to adopt the term 

‘‘Auction ADV’’ which would mean the 

average daily auction volume calculated 

as the number of shares executed in an 

auction per day. The Exchange also 

proposes to adopt the term ‘‘Step-Up 

Auction ADV’’ which would mean the 

Auction ADV in the relevant baseline 

month subtracted from current Auction 

ADV. 

Proposed Tier Changes 

The Exchange proposes to modify the 

tiers in order to account for volume 

executed in a Periodic Auction. As 

noted above, the Exchange offers tiered 

pricing which provides Members 

opportunities to qualify for higher 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 92 / Thursday, May 12, 2022 / Notices 29203 

17Footnote 1, Add/Remove Volume Tiers, applies 

to fee codes B, V, and Y. The Exchange now 

proposes to add Footnote 1 to fee code, AD. 18Footnote 2, Step-Up Tiers, applies to fee codes 

B, V, and Y. The Exchange now proposes to add 

Footnote 2 to fee code, AD. 19Footnote 3, Routing Tier, applies to fee code, 

C (Routed to NASDAQ BX using Destination 

Specific, TRIM or SLIM routing strategies). AU/AH/ 

AD are included in the calculations to qualify for 

the Routing Tier rebates. 20 ‘‘ADV’’ means average daily volume calculated 

as the number of shares added or removed, 

combined, per day. 21 ‘‘ADAV’’ means average daily volume 

calculated as the number of shares added per day. 22 ‘‘Step-Up ADAV’’ means ADAV in the relevant 

baseline month subtracted from current ADAV. 23 ‘‘TCV’’ means total consolidated volume 

calculated as the volume reported by all exchanges 

and trade reporting facilities to a consolidated 

transaction reporting plan for the month for which 

the fees apply. 24The Exchange notes that Remove Volume Tiers 

7 and 8 do not reference ADV or ADAV, but instead 

reference certain liquidity removing volume 

executed on the Exchange. 

25The Exchange is not modifying the applicable 

fees and rebates associated with Tiers 1 through 4. 

Rather, the Exchange seeks only to add new types 

of volume that count toward the Tiers. 

26Based on the proposal to allow orders yielding 

fee code AD to qualify towards the Add Volume 

Tiers 1 through 5 and Step-Up Tier, the Exchange 

also proposes to append footnotes 1 and 2 to Fee 

Code AD. 27 15 U.S.C. 78f. 28 15 U.S.C. 78f(b)(4). 29See e.g., the Cboe BZX U.S. Equities Fee 

Schedule, which charges fees ranging from 

$0.00060 up to $0.00100 for orders executed in an 

auction. 

rebates or reduced fees where certain 

volume criteria and thresholds are met. 

The Exchange offers three sets of tiers as 

set forth in footnotes 1 through 3 of the 

Fee Schedule. Specifically, under 

footnote 1 17 of the Fee Schedule, the 

Exchange offers Add/Remove Volume 

Tiers, which offer various enhanced 

rebates and reduced fees for reaching 

certain, incrementally more challenging 

volume-based thresholds. Under 

footnote 2 18 of the Fee Schedule, the 

Step-Up Tiers offers a reduced fee to 

Members that increase their relative add 

volume order flow each month over a 

predetermined baseline as well as add 

liquidity over and established threshold. 

Last, under footnote 3 19 of the Fee 

Schedule, the Exchange offers the 

Routing Tier which offers an enhanced 

rebate for orders routed to Nasdaq BX 

through the Destination Specific or 

TRIM routing strategies. Under each of 

footnotes 1 through 3, the required 

criteria of certain tiers reference a 

Member’s ADV,20 ADAV,21 or Step-Up 

ADAV 22 as follows: 

• The Add Volume Tiers 1 through 4 

provide a reduced fee for each Member’s 

qualifying orders that have an ADAV 

equal to or greater than a certain 

percentage of TCV; 

• The Add Volume Tier 5 provides a 

reduced fee to each MPID’s qualifying 

orders that have an ADAV equal to or 

greater than a certain percentage of the 

TCV; 23

• The Remove Volume Tier 6 

provides the applicable rebate to each 

Member’s qualifying orders that have (1) 

an ADV equal to or greater than 0.08% 

of the TCV; and (2) an ADAV equal to 

or greater than 500,00 shares meet the 

required criteria; 24

• The Step-Up Tier provides a 

reduced fee to each Member’s qualifying 

orders where a Member (1) adds a StepUp ADAV from June 2021 equal to or 

greater than 0.05% of TCV or adds a 

Step-Up ADAV from June 2021 equal to 

or greater than 2,000,000; and (2) has a 

total add ADAV equal to or greater than 

0.25% of TCV. 

• The Routing Tier provides the 

applicable rebate to each Member’s 

qualifying orders with an ADV equal to 

or greater than 0.10% of the TCV. 

Now, the Exchange proposes to 

modify each of the above referenced 

Tiers to include auction volume where 

ADV, ADAV, and Step-Up ADAV are 

referenced.25 Therefore, the Exchange 

proposes the required criteria of the 

above Tiers as follows: 

• The Add Volume Tiers 1 through 4 

provide a reduced fee to each Member’s 

qualifying orders that have a combined 

Auction ADV and ADAV equal to or 

greater than a certain percentage of the 

TCV; 

• The Add Volume Tier 5 provides a 

reduced fee to each MPID’s qualifying 

orders that have a combined Auction 

ADV and ADAV equal to or greater than 

a certain percentage of the TCV; 

• The Remove Volume Tier 6 would 

provide the applicable rebate to 

Members’ qualifying orders that have (1) 

a combined Auction ADV and ADV 

equal to or greater than 0.08% of the 

TCV; and (2) a combined Auction ADV 

and ADAV equal to or greater than 

500,000 shares would meet the required 

criteria; and 

• The Step-Up Tier would provide a 

reduced fee to each Member’s qualifying 

orders with (1) a combined Step-Up 

Auction ADV and Step-Up ADAV from 

June 2021 equal to or greater than 0.05% 

of TCV or a combined Step-Up Auction 

ADV and Step-Up ADAV from June 

2021 equal to or greater than 2,000,000; 

and (2) a combined Auction ADV and 

ADAV equal to or greater than 0.25% of 

TCV; and 

• The Routing Tier would provide the 

applicable rebate to Members’ 

qualifying orders with a combined 

Auction ADV and ADV of equal to or 

greater than 0.10% of the TCV. 

As discussed above, orders yielding 

fee code AD will represent displayed 

Continuous Book Orders that add 

liquidity to the Exchange. Therefore, if 

such orders did not execute in a 

Periodic Auction, they would be 

appended with fee code B, V, or Y, as 

applicable, and those executions would 

qualify towards the Add Volume Tiers 

1 through 5 and the Step-Up Tier. 

Continuous Book Orders that add 

liquidity to the Exchange will 

participate in a Periodic Auction, if 

eligible. Therefore, to ensure such 

orders are not disincentivized to 

participate in such a Periodic Auction, 

the Exchange proposes to allow orders 

yielding fee code AD to qualify towards 

the Add Volume Tiers 1 through 5 and 

Step-Up Tier, as well qualify for the 

reduced fees or rebates provided by 

such Tiers.26

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,27

in general, and furthers the objectives of 

Section 6(b)(4),28 in particular, as it is 

designed to provide for the equitable 

allocation of reasonable dues, fees and 

other charges among its members and 

other persons using its facilities. 

Specifically, the Exchange believes that 

the proposed rule change is consistent 

with the requirements of the Act as it is 

designed to compensate the Exchange 

for the development of new and 

innovative market features, i.e., Periodic 

Auctions, while continuing to provide a 

pricing model that the Exchange 

believes is competitive with pricing 

models offered by other national 

securities exchanges that offer auctions 

to their customers. 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. The 

proposed rule change reflects a 

competitive pricing structure designed 

both to compensate the Exchange for the 

introduction of innovative features and 

allow it to continue to compete 

aggressively with other market centers. 

As discussed, the proposed rule 

change would introduce pricing that is 

specific to orders executed in a Periodic 

Auction. Generally, orders executed in 

an auction on other market centers are 

subject to a fee.29 However, the 

Exchange proposes to charge no fee for 

orders that may initiate a Periodic 

Auction (i.e., orders yielding fee code 

AU) in order to incentivize Members to 

enter such orders on the Exchange. As 

proposed, orders yielding fee code AD 

will represent displayed Continuous 


khammond on DSKJM1Z7X2PROD with NOTICES
29204 Federal Register / Vol. 87, No. 92 / Thursday, May 12, 2022 / Notices 

30Fee code ‘‘HA’’ is appended to non-displayed 

orders adding liquidity to BYX. 

31Fee code ‘‘HI’’ is appended to non-displayed 

orders adding liquidity to BYX that receive price 

improvement. 

32Fee code ‘‘MM’’ is appended to non-displayed 

orders adding liquidity to BYX using a midpoint 

peg. 

33For example, orders that would have been 

appended with fee code HA or HI had they not 

executed in a Periodic Auction would be assessed 

a lesser fee if executed in a Periodic Auction (and 

thus appended with fee code AH). 

Book Orders that add liquidity to the 

Exchange. Therefore, if such orders did 

not execute in a Periodic Auction, they 

would be appended with fee code B, V, 

or Y, as applicable, and would be 

charged a fee of $0.00200. Given this, 

the Exchange proposes that orders 

yielding fee code AD also be charged a 

fee of $0.00200 so that the fee is 

congruent with orders with the same 

order instruction that did not execute in 

a Periodic Auction. As discussed above, 

non-displayed orders that are not 

Periodic Auction Only or Periodic 

Auction Eligible Orders would be 

appended with fee code AH. Such nondisplayed orders would include orders 

that would otherwise yield fee codes 

HA,30 HI,31 or MM 32 had they not 

executed in a Periodic Auction. Orders 

yielding fee code HA are assessed a fee 

of $0.00240 per share, orders yielding 

fee code HI are assessed a fee of 

$0.00300 per share, and orders yielding 

fee code MM are assessed a fee of 

$0.00100 per share. Given this, the 

Exchange proposes to assess a fee of 

$0.00100 per share to orders yielding fee 

code AH so that there is no 

disadvantage for a non-displayed order 

to have executed in a Periodic Auction 

rather than on the Continuous Book. 

The Exchange believes that the 

proposed fees associated with orders 

executed in a Periodic Auction are 

equitable and not unfairly 

discriminatory because they would 

apply equally to all orders executed in 

a Periodic Auction and meeting the 

applicable execution description. As 

discussed, Periodic Auction Only and 

Periodic Auction Eligible order 

instructions are optional, and a market 

participant can choose to include such 

an instruction in order to benefit from 

a free execution in the Periodic Auction. 

Furthermore, while orders entered on 

the Continuous Book that are eligible to 

participate in a Periodic Auction must 

participate in the Periodic Auction, the 

proposed fees are designed to ensure 

that such executions occur at a fee that 

is equal or favorable to the fee they 

would have otherwise been assessed 

had the order not executed in a Periodic 

Auction. 

The Exchange believes the proposed 

modifications to the various Tiers are 

equitable and reasonable. As discussed 

above, if orders yielding fee code AD 

did not execute in a Periodic Auction, 

they would be appended with fee code 

B, V, or Y, as applicable, and such 

executions would have counted towards 

the Add Volume Tiers 1 through 5 and 

Step-Up Tier. The proposal to include 

fee code AD to the applicable fee codes 

of the Add Volume Tiers 1 through 5 

and Step-Up Tier is designed to ensure 

that orders yielding such fee codes are 

not disadvantaged for having executed 

in a Periodic Auction rather than the 

Continuous Book. Additionally, the 

proposed modifications to the various 

required criteria of the Tiers is designed 

to ensure that shares executed in a 

Periodic Auction are considered in 

conjunction with any volume added to 

the Exchange. As discussed above, 

certain types of orders that may be 

executed in a Periodic Auction would 

be included in the Member’s or MPID’s 

ADV, ADAV, and Step-Up ADAV if they 

had otherwise not executed in a 

Periodic Auction (e.g., orders appended 

with fee code B, V, or Y). Therefore, so 

as not to disadvantage Members or 

MPIDs participating in a Periodic 

Auction, the Exchange proposes that 

such orders executed in a Periodic 

Auction will count toward any required 

criteria of a Tier involving ADV, ADAV, 

or Step-Up ADAV. The Exchange 

believes it is reasonable and equitable 

not to include volume executed in a 

Periodic Auction in a Member’s remove 

volume because such orders would not 

have removed volume on the Exchange 

had they not executed in a Periodic 

Auction. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

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. Rather, the 

Exchange believes that the proposed 

changes to its fees would promote 

continued competition between the 

Exchange, other national securities 

exchanges, and off-exchange venues that 

must continuously compete to offer both 

competitive pricing and services to 

members and investors. As proposed, 

the Exchange would charge fee ranging 

from free up to $0.0020 per share for 

orders executed in a Periodic Auction. 

Charging fees for the use of this 

instruction would both compensate for 

the development and introduction of 

new and innovative features, and 

provide continued incentives for the 

Exchange to compete on both cost and 

the quality of its products and services. 

The Exchange believes the proposed 

new fee codes would not impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The proposed fee codes would apply to 

all Members equally in that all Members 

would be subject to the applicable fee 

for executing in the Periodic Auction 

based on its order instruction. The 

Exchange’s proposed pricing is based on 

the characteristics of the order that is 

executed and has been proposed to 

reflect that no order will be 

disadvantaged by participating in a 

Periodic Auction as opposed to 

executing on the Exchange’s continuous 

book. In fact, certain orders may benefit 

from executing in a Periodic Auction by 

receiving a reduced fee than it would 

not have otherwise received had it 

executed on the Exchange’s Continuous 

Book.33

Similarly, the Exchange does not 

believe the proposed changes to the 

Exchange’s tiers will impose any burden 

on intramarket competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The revised 

tiers will continue to be available 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 

or enhanced rebate on their qualifying 

orders if such criteria is met. The 

proposed changes to the Exchange’s 

tiers are simply designed to ensure that 

no orders executed in a Periodic 

Auction are excluded from a tier for 

which they otherwise would have 

counted towards had the order not 

executed in a Periodic Auction. The 

Exchange does not believe the proposed 

change to modify the tiers burdens 

competition, but rather, enhances 

competition as it is intended to increase 

the competitiveness of BYX by ensuring 

Members are not disincentivized to 

participate in Periodic Auctions and 

thus may increase their participation on 

the Exchange, providing for additional 

execution opportunities for market 

participants and improved price 

transparency. 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. 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 87, No. 92 / Thursday, May 12, 2022 / Notices 29205 

34See Cboe Global Markets, U.S. Equities Market 

Volume Summary, Month-to-Date (April 11, 2022), 

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

market_statistics/. 

35See Securities Exchange Act Release No. 51808 

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

36NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. 

Cir. 2010) (quoting Securities Exchange Act Release 

No. 59039 (December 2, 2008), 73 FR 74770, 74782– 

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

37 15 U.S.C. 78s(b)(3)(A). 

38 17 CFR 240.19b–4(f). 

39 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

As previously discussed, the Exchange 

operates in a highly competitive market. 

In such an environment, the Exchange 

must continually review, and consider 

adjusting, its fees and rebates to remain 

competitive with other exchanges. 

Members have numerous alternative 

venues that they may participate on and 

direct their order flow, including other 

equities exchanges, off-exchange 

venues, and alternative trading systems. 

Additionally, the Exchange represents a 

small percentage of the overall market. 

Based on publicly available information, 

no single equities exchange has more 

than 17% of the market share.34

Therefore, no exchange possesses 

significant pricing power in the 

execution of order flow. Indeed, 

participants can readily choose to send 

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

at those other venues to be more 

favorable. Moreover, the Commission 

has repeatedly expressed its preference 

for competition over regulatory 

intervention in determining prices, 

products, and services in the securities 

markets. Specifically, in Regulation 

NMS, the Commission highlighted the 

importance of market forces in 

determining prices and SRO revenues 

and, also, recognized that current 

regulation of the market system ‘‘has 

been remarkably successful in 

promoting market competition in its 

broader forms that are most important to 

investors and listed companies.’’ 35 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’. . . .’’.36 Accordingly, the 

Exchange does not believe its proposed 

fee changes imposes any burden on 

competition that is not necessary or 

appropriate in furtherance of the 

purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 19(b)(3)(A) 

of the Act 37 and paragraph (f) of Rule 

19b–4 38 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– 

CboeBYX–2022–016 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–CboeBYX–2022–016. 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–CboeBYX–2022–016, and 

should be submitted on or before June 

2, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.39

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–10146 Filed 5–11–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94864; File No. SR– 

CboeEDGX–2022–026] 

Self-Regulatory Organizations; Cboe 

EDGX Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of a 

Proposed Rule Change To Amend Its 

Fee Schedule 

May 6, 2022. 

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 May 2, 

2022, 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. 


khammond on DSKJM1Z7X2PROD with NOTICES