42222 Federal Register / Vol. 87, No. 134 / Thursday, July 14, 2022 / Notices 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed fee 

changes on June 27, 2022 (SR–CBOE–2022–031). 

On June 28, 2022, the Exchange withdrew that 

filing and submitted SR–CBOE–2022–033. On June 

30, 2022 the Exchange withdrew that filing and 

submitting this filing. 

4Underlying Symbol List A currently includes 

OEX, XEO, RUT, RLG, RLV, RUI, UKXM, SPX 

(includes SPXW), SPESG and VIX. See Cboe 

Options Fees Schedule, Footnote 34. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

under the PRA unless it displays a 

currently valid OMB control number. 

Please direct your written comments 

to: David Bottom, Director/Chief 

Information Officer, Securities and 

Exchange Commission, c/o John 

Pezzullo, 100 F Street NE, Washington, 

DC 20549, or send an email to: PRA_

Mailbox@sec.gov. 

Dated: July 8, 2022. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–14995 Filed 7–13–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95225; File No. SR–CBOE– 

2022–034] 

Self-Regulatory Organizations; Cboe 

Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Update Its Fees 

Schedule in Connection With the 

Exchange’s Plans To List and Trade 

FLexible EXchange Index Options With 

an Index Multiplier of One 

July 8, 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 June 30, 

2022, Cboe Exchange, Inc. (the 

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

with the Securities and Exchange 

Commission (the ‘‘Commission’’) the 

proposed rule change as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comments on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

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

or ‘‘Cboe Options’’) proposes to update 

its Fees Schedule in connection with 

the Exchange’s plans to list and trade 

FLexible EXchange (‘‘FLEX’’) index 

options with an index multiplier of one 

(‘‘FLEX Micro Options’’). The text of the 

proposed rule change is provided in 

Exhibit 5. 

The text of the proposed rule change 

is also available on the Exchange’s 

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

AboutCBOE/ 

CBOELegalRegulatoryHome.aspx), at 

the Exchange’s Office of the Secretary, 

and at the Commission’s Public 

Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend its 

Fees Schedule in connection with its 

plans to list and trade FLEX Micro 

Options.3

By way of background, the Exchange 

has adopted rules to accommodate the 

listing and trading of certain FLexible 

EXchange (‘‘FLEX’’) index options with 

an index multiplier of one (‘‘FLEX 

Micro Options’’) rather than the 

conventional 100. FLEX Micro Options 

will be available on the following 

indices effective June 27, 2022: S&P 500, 

Russell 2000 (RUT), Dow Jones 

Industrial Average (DJX), MSCI 

Emerging Markets (MXEF), and MSCI 

EAF (MXEA). The Exchange believes 

FLEX Micro Options will expand 

investors’ choices and flexibility by 

listing and trading FLEX options on 

larger-valued broad-based indexes, 

which provide investors with the ability 

to gain exposure to the market, with a 

notional value of 1/100th of the value of 

currently available FLEX Index Options. 

The Exchange believes the additional 

granularity provided by FLEX Micro 

Options with respect to the prices at 

which investors may execute and 

exercise index options on the Exchange 

will appeal to institutional investors by 

providing them with an additional 

exchange-traded tool to manage the 

positions and associated risk in their 

portfolios more precisely based on 

notional value, which currently may 

equal a fraction of a standard contract. 

The Exchange now proposes to amend 

its Fees Schedule to accommodate the 

planned listing and trading of FLEX 

Micro options. 

Standard Transaction Rates 

First, the Exchange proposes to adopt 

certain standard transaction fees in 

connection with FLEX Micro Options. 

Specifically, the proposed rule change 

adopts certain fees for FLEX Micro 

Options in the ‘‘Rate Table for All 

Products Excluding Underlying Symbol 

A’’.4 The Exchange notes that the 

proposed standard transaction fees in 

connection with FLEX Micros Options 

are lower-priced than standard FLEX 

options on the corresponding indices 

given their multiplier of one (as 

compared to 100 for standard FLEX 

options). Indeed, the proposed 

transaction fees are generally near, or 

approximately, 1/100th of the fees 

currently assessed for the corresponding 

standard FLEX options (inclusive of the 

Execution Surcharge, License 

Surcharges and FLEX Surcharges, as 

applicable). The proposed fees are as 

follows: 

RUT FLEX Micro Options 

• Adopts fee code GA, appended to 

all (i) Customer (capacity ‘‘C’’), (ii) 

Market-Maker (capacity ‘‘M’’), and (iii) 

Clearing Trading Permit Holders 

(‘‘TPHs’’) (capacity ‘‘F’’) and NonClearing TPH Affiliates (capacity 

‘‘L’’)(collectively, ‘‘Firms’’) orders in 

RUT FLEX Micro Options and assesses 

a fee of $0.009 per contract. 

• Adopts fee code GB, appended to 

all Broker-Dealers (capacity ‘‘B’’), Joint 

Back-Offices (capacity ‘‘J’’), NonTrading Permit Holder Market-Makers 

(capacity ‘‘N’’), and Professionals 

(capacity ‘‘U’’) (collectively, ‘‘NonCustomers’’) manual and AIM (Agency/ 

Primary and Contra) orders in RUT 

FLEX Micro Options and assesses a fee 

of $0.009 per contract.; and 

• Adopts fee code GC, which is 

appended to all Non-Customer 

electronic orders in RUT FLEX Micro 

Options and assesses a fee of $0.012 per 

contract. 

SPX FLEX Micro Options 

• Adopts fee code GE, appended to 

all (i) Customer and (ii) Firm orders in 

SPX FLEX Micro Options and assesses 

a fee of $0.008 per contract; 


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5The Exchange notes the Trading Processing 

Services Fee, which is currently assessed a rate of 

$0.0025 per contract side, will apply to FLEX Micro 

Options. 

6NANOS options are options on the Mini-S&P 

500 (‘‘XSP’’) Index (the value of which is 1/10th the 

value of the S&P 500 (‘‘SPX’’) Index) that have an 

index multiplier of one. 

7The Exchange proposes to eliminate the current 

language under footnote 33 relating to billing 

information for October 2019, as it is no longer 

relevant or needed, and replace it with the 

proposed new language. Footnote 33 is already 

appended to the following tables in the Fees 

Schedule: SPX/SPXW and SPESG Liquidity 

Provider Sliding Scale, Liquidity Provider Sliding 

Scale, Liquidity Provider Sliding Scale Adjustment 

Table, Volume Incentive Program, Affiliate Volume 

Plan, Clearing Trading Permit Holder Proprietary 

Products Sliding Scale, Clearing Trading Permit 

Holder VIX Sliding Scale, and Select Customer 

Options Reduction (‘‘SCORe’’) Program. The 

Exchange is maintaining the appended references to 

footnote 33 in each of these tables, other than the 

Clearing Trading Permit Holder VIX Sliding Scale, 

as footnote 33 will continue to be applicable to the 

programs as such programs will be listed in 

proposed footnote 33 as a program where FLEX 

Micro options is excluded. Because the Exchange is 

not offering a VIX FLEX Micro Option product at 

this time, the Clearing Trading Permit Holder VIX 

Sliding Scale is not applicable and the Exchange 

therefore proposes to eliminate the current 

reference to footnote 33 that currently is appended 

to that table. 

8The Exchange notes that the Marketing Fee 

already excludes all FLEX Options. See Cboe 

Options Fees Schedule, Marketing Fee Table. The 

Exchange still proposes to append proposed 

footnote 33 to the Marketing Fee Table for further 

clarity as to applicability of the exclusion for FLEX 

Micros Options. 

• Adopts fee code GF, appended to 

all Market-Maker orders in SPX FLEX 

Micro Options and assesses a fee of 

$0.006 per contract; and 

• Adopts fee code GD, which is 

appended to all appended to all NonCustomer orders in SPX FLEX Micro 

Options and assesses a fee of $0.009 per 

contract. 

MXEA and MXEF FLEX Micro Options 

• Adopts fee code GG, appended to 

all Customer orders in MXEA and 

MXEF FLEX Micro Options and assesses 

a fee of $0.004 per contract; 

• Adopts fee code GI, appended to all 

(i) Firm and (ii) Non-Customer 

electronic orders in MXEA and MXEF 

FLEX Micro Options and assesses a fee 

of $0.010 per contract; 

• Adopts fee code GH, appended to 

all Market-Maker manual, electronic 

and AIM Agency/Primary orders in 

MXEA and MXEF FLEX Micro Options 

and assesses a fee of $0.005 per contract; 

• Adopts fee code GK, appended to 

all (i) Firm and (ii) Non-Customer 

manual and AIM Agency/Primary 

orders in MXEA and MXEF FLEX Micro 

Options and assesses a fee of $0.005 per 

contract; 

• Adopts fee code GL, appended to 

all (i) Firm, (ii) Market-Maker and (iii) 

Non-Customer AIM Contra orders in 

MXEA and MXEF FLEX Micro Options 

and assesses a fee of $0.003 per contract; 

and 

• Adopts fee code GN, appended to 

all (i) Firm, (ii) Market-Maker and (iii) 

Non-Customer AIM Response orders in 

MXEA and MXEF FLEX Micro Options 

and assesses a fee of $0.013 per contract. 

DJX FLEX Micro Options 

• Adopts fee code GG, appended to 

all Customer orders in DJX FLEX Micro 

Options and assesses a fee of $0.004 per 

contract; 

• Adopts fee code GJ, appended to all 

(i) Firm and (ii) Non-Customer 

electronic orders in DJX FLEX Micro 

Options and assesses a fee of $0.007 per 

contract; 

• Adopts fee code GH, appended to 

all Market-Maker manual, electronic 

and AIM Agency/Primary orders in DJX 

FLEX Micro Options and assesses a fee 

of $0.005 per contract; 

• Adopts fee code GK, appended to 

all (i) Firm and (ii) Non-Customer 

manual and AIM Agency/Primary 

orders in DJX FLEX Micro Options and 

assesses a fee of $0.005 per contract; 

• Adopts fee code GL, appended to 

all (i) Firm, (ii) Market-Maker and (iii) 

Non-Customer AIM Contra orders in 

DJX FLEX Micro Options and assesses a 

fee of $0.003 per contract; and 

• Adopts fee code GM, appended to 

all (i) Firm, (ii) Market-Maker and (iii) 

Non-Customer AIM Response orders in 

DJX FLEX Micro Options and assesses a 

fee of $0.007 per contract. 

Surcharges 

The Exchange does not propose to 

apply any current surcharges to FLEX 

Micro options.5 Particularly, the 

Exchange proposes to exclude FLEX 

Micro Options from the surcharges set 

forth in the Rate Table for All Products 

Excluding Underlying Symbol List A 

(i.e., the Complex Surcharge Fee, the 

Surcharge Fee Index License and the 

FLEX Surcharge Fee). The Exchange 

proposes to amend corresponding 

footnotes 35, 14, and 17, respectively, to 

make clear FLEX Micro Options 

transactions are excluded from these 

surcharges. 

Fee Programs 

The Exchange proposes to exclude 

FLEX Micro Options from all pricing 

programs. The Exchange notes that 

because FLEX Micro Options are all 

options on broad-based indices, the 

majority of the proposed changes amend 

the Fees Schedule in connection with 

trading in FLEX Micro Options in a 

manner that is generally consistent with 

the way in which many existing fee 

programs currently do not apply to 

trading standard options on those same 

indices. Additionally, the Exchange 

notes that the majority of the proposed 

changes also amend the Fees Schedule 

in a manner that is generally consistent 

with the way in which existing fee 

programs currently do not apply to 

trading in another options product that 

has an index multiplier of one and thus 

a smaller notional value (i.e., NANOS 6). 

First, the Exchange proposes to adopt 

footnote 33 (and append to fee tables as 

applicable and needed) to make clear 

that FLEX Micro Options volume will 

be excluded from the following 

programs: 7 (i) SPX/SPXW and SPESG 

Liquidity Provider Sliding Scale, which 

offers credits on Market-Maker orders 

where a Market-Maker achieves certain 

volume thresholds based on MarketMaker volume in SPX, SPXW and 

SPESG, (ii) the Liquidity Provider 

Sliding Scale, which offers credits on 

Market-Maker orders where a MarketMaker achieves certain volume 

thresholds based on total national 

Market-Maker volume in all underlying 

symbols, excluding Underlying Symbol 

List A, MRUT, NANOS and XSP during 

the calendar month, (iii) the Liquidity 

Provider Sliding Scale Adjustment 

Table, which provides that Taker fees be 

applied to electronic ‘‘Taker’’ volume 

and a Maker rebate be applied to 

electronic ‘‘Maker’’ volume, in addition 

to the transaction fees assessed under 

the Liquidity Provider Sliding Scale, (iv) 

the Volume Incentive Program (‘‘VIP’’), 

which offers a per contract credit for 

certain percentage threshold levels of 

monthly Customer volume in all 

underlying symbols, excluding 

Underlying Symbol List A, Sector 

Indexes, DJX, MRUT, MXEA, MXEF, 

NANOS and XSP, (v) Break-Up Credits, 

which provides credits to orders 

executed in AIM, SAM, FLEX AIM, and 

FLEX SAM to all products except 

Underlying Symbol List A, Sector 

Indexes, DJX, MRUT, MXEA, MXEF, 

NANOS and XSP, (vi) Marketing Fee, 

which is assessed on transactions of 

Market-Makers resulting from Customer 

orders in all products except Sector 

Indexes, DJX, MRUT, MXEA, MXEF and 

Underlying Symbol List A,8 (vii) the 

Cboe Options Clearing Trading Permit 

Holder Proprietary Products Sliding 

Scale, which provides transaction fees 

for Firms in Underlying Symbol List 

A will be reduced provided a Firm 

reaches certain average daily volume 

(‘‘ADV’’) thresholds, (vii), Clearing TPH 

Fee Cap, which provides a cap on Firm 

transaction fees, (viii), Select Customer 

Options Reduction (‘‘SCORe’’) Program, 

which is a discount program for Retail, 

Customer volume in SPX, SPXW, VIX, 


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9The Exchange notes that the SCORe program 

already excludes all FLEX Options. See Cboe 

Options Fees Schedule, SCORe Table. The 

Exchange still proposes maintain footnote 33, 

which is currently appended to the SCORe Table, 

for further clarity as to applicability of the 

exclusion for FLEX Micros Options. 

10 15 U.S.C. 78f. 

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

12 15 U.S.C. 78f(b)(5). 

RUT, MXEA, and MXEF,9 (ix) Customer 

Large Trade Discount, which provides a 

discount in the form of a cap on 

transaction fees for certain Customer 

executions, (x) Market-Maker Tier 

Appointment Fees, which assesses per 

permit surcharges if Market-Makers 

meet certain volume thresholds in SPX/ 

SPX, VIX and RUT, respectively, (xi) 

Floor Broker Trading Surcharge, which 

assesses a surcharge to Floor Brokers if 

they execute a certain threshold in SPX/ 

SPXW and VIX volume, respectively, 

(xii) Floor Broker Sliding Scale Rebate 

Program, offers rebates for Firm 

Facilitated and non-Firm Facilitated 

orders that correspond to certain 

volume tiers and is designed to 

incentivize order flow in multiply-listed 

options to the Exchange’s trading floor, 

(xiii) Floor Broker ADV Discount, which 

provides Floor Brokers rebates on their 

Trading Permit fees based on ADV 

thresholds, (xiv) Floor Brokerage Fees, 

which provides discounted rates to 

executing brokers for cross and noncrossed orders in OEX, XEO, RUT, RLG, 

RLV, RUI, UKXM, SPX/SPXW, SPESG 

and VIX, (xv) Floor Brokerage Fees 

Discount Scale, which provides Floor 

Brokers opportunity to receive 

discounts on fees for orders in OEX, 

XEO, RUT, SPX, SPXW, SPESG, VIX 

based on meeting certain volume 

thresholds, (xvi) GTH Executing Agent 

Subsidy Program which provides 

designated GTH executing agents a 

monthly subsidy based on GTH monthly 

Customer volume thresholds, (xvii) 

Order Router Subsidy Program and 

Complex Order Router Subsidy 

Program, which provides that 

Participating TPHs or Participating NonCboe TPHs may receive a payment from 

the Exchange for every executed 

contract routed to the Exchange through 

their system in certain classes and 

(xviii) Frequent Trader Program, which 

provides an opportunity for customer 

orders to receive rebates based on 

meeting different volume thresholds in 

SPX/SPXW, VIX and RUT. 

The Exchange also proposes to update 

footnote 6, which is appended to the 

Liquidity Provider Sliding Scale 

Program, Liquidity Provider Sliding 

Scale Adjustment Table, Affiliate 

Volume Plan, VIP, SCORe and the ORS/ 

CORS Programs and footnote 36 which 

is appended to VIP. Specifically, current 

footnotes 6 and 36 provides that in the 

event of a Cboe Options System outage 

or other interruption of electronic 

trading on Cboe Options that lasts 

longer than 60 minutes, the Exchange 

will adjust the national volume in all 

underlying symbols excluding 

Underlying Symbol List A, Sector 

Indexes, MRUT, MXEA, MXEF, 

NANOS, DJX, and XSP for the entire 

trading day. The Exchange proposes to 

add FLEX Micro Options to the 

exclusion list. 

The Exchange also proposes to clarify 

in footnote 11, that for facilitation 

orders (other than Sector Indexes (47), 

FLEX Micros and Underlying Symbol 

List A (34)) executed in open outcry, 

Cboe Options will assess no Clearing 

Trading Permit Holder Proprietary 

transaction fees, as proposed fee codes 

for Firm orders in FLEX Micro 

transactions will supersede facilitation 

fee codes (currently FF or FI) for any 

facilitation orders in FLEX Micro 

Options. 

The Exchange notes that a few of the 

programs listed above in which FLEX 

Micros will be excluded also exclude 

and enumerate other products in the 

respective program’s table header, notes 

section and/or corresponding footnote. 

Where such exclusions are listed, the 

Exchange proposes to add references to 

FLEX Micros to make clear that, as 

discussed above and as will be reflected 

in proposed [sic] 33, FLEX Micros are 

also excluded from the applicable 

program. Accordingly, the Exchange 

proposes to add a reference to FLEX 

Micros to the exclusion lists set forth in 

each of the following respective 

program table headers, notes sections 

and/or footnotes: Liquidity Provider 

Sliding Scale notes section, VIP header, 

Break-Up Credits header, Marketing Fee 

notes section, Floor Broker Sliding Scale 

Rebate Program notes section, ORS and 

CORS notes sections, footnote 10, 

footnote 11, footnote 22, footnote 29, 

footnote 30, and footnote 36. 

Clarifying Changes 

The Exchange lastly proposes to 

amend footnotes 18, 19 and 20 of the 

Fees Schedule. The foregoing footnotes 

describe the AIM Contra Execution Fee, 

the AIM Agency/Primary Fee and the 

AIM Responder Fee, respectively. The 

Exchange proposes to revise the current 

language in each footnote to make clear 

that applicable standard transaction fees 

apply for all orders executed in the 

Automated Improvement Mechanism 

(‘‘AIM’’), Solicitation Auction 

Mechanism (‘‘SAM’’), FLEX AIM and 

FLEX SAM auctions (that were initially 

entered as (i) the contra party to an 

Agency/Primary Order, (ii) the Agency/ 

Primary Order, or (iii) an AIM Response, 

respectively) unless otherwise indicated 

in the Rate Tables. The Exchange does 

not believe it is necessary to list the 

applicable products or exclusions in the 

footnotes, as the Rate Tables in the Fees 

Schedule already detail what fee codes 

and corresponding fees apply for each of 

these transactions for each capacity and 

product. The Exchange believes the 

proposed change eliminates 

unnecessary redundancy and eliminates 

potential confusion. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the objectives of Section 6 of the Act,10

in general, and furthers the objectives of 

Section 6(b)(4),11 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) 12 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. 

The Exchange believes that the 

proposed amendments to the Fees 

Schedule in connection with standard 

transaction rates for FLEX Micro 

Options transactions are reasonable, 

equitable and not unfairly 

discriminatory. Specifically, the 

Exchange believes that it is reasonable 

to assess fees for Customer, MarketMaker, Firm and Non-Customer orders 

in FLEX Micro Options that are less 

than those fees for transactions in the 

corresponding standard RUT, SPX, 

MXEF, MXEA and DJX FLEX options 

(all of which overly the same respective 

indices as the proposed FLEX Micro 

Options) because FLEX Micro Options 

have a smaller notional value given 

their multiplier of one. Moreover, the 

Exchange believes the proposed 

transaction fees are reasonable as such 

fees reflect approximately 1/100th of the 

transaction fees (inclusive of surcharges) 


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assessed for the corresponding 

transactions in standard RUT, SPX, 

MXEF, MXEA and DJX FLEX options, 

which as discussed have a multiplier of 

100 instead of one like FLEX Micro 

Options. The Exchange believes its 

reasonable to exclude FLEX Micro 

Options from additional surcharges as 

TPHs will not be subject to such 

surcharges. 

The Exchange believes the proposed 

standard transaction rates and exclusion 

from certain surcharges are equitable 

and not unfairly discriminatory because 

they will apply automatically and 

uniformly to all capacities as applicable 

(i.e., Customer, Market-Make, Firm and 

Non-Customer), in FLEX Micro Options. 

The Exchange also notes that with 

respect to lower transaction rates for 

Customer transactions in certain FLEX 

Micro Options, there is a history in the 

options markets of providing 

preferential treatment to customers and 

customer order flow attracts additional 

liquidity to the Exchange, providing 

market participants with more trading 

opportunities and signaling an increase 

in Market-Maker activity, which 

facilitates tighter spreads. This may 

cause an additional corresponding 

increase in order flow from other market 

participants, contributing overall 

towards a robust and well-balanced 

market ecosystem, particularly in a 

newly listed and traded product. The 

Exchange also believes that it is 

equitable and not unfairly 

discriminatory to propose lower 

transaction rates for certain MarketMaker and Firm orders in certain FLEX 

Micro Options because the Exchange 

recognizes that these market 

participants can provide key and 

distinct sources of liquidity, which is 

particularly important for a newly listed 

and traded options class on the 

Exchange. An increase in general 

market-making activity facilitates tighter 

spreads, which tend to signal additional 

corresponding increase in order flow 

from other market participants, 

ultimately incentivizing more overall 

order flow and improving liquidity 

levels and price transparency on the 

Exchange to the benefit of all market 

participants. Similarly, the Exchange 

also recognizes that Firms can be an 

important source of liquidity when they 

facilitate their own customers’ trading 

activity, thus, adding transparency and 

promoting price discovery to the benefit 

of all market participants. The Exchange 

notes too that Market-Makers and Firms 

take on a number of obligations that 

other market participants do not have. 

For example, unlike other market 

participants, Market-Makers take on 

quoting obligations and other market 

making requirements and Firms must 

have higher capital requirements, clear 

trades for other market participants, and 

must be members of OCC. The Exchange 

also notes the proposal to not assess 

surcharges to FLEX Micro Options is 

equitable and not unfairly 

discriminatory as it applies to all market 

participants (i.e., no market participant 

will be subject to those surcharges). 

The Exchange believes that the 

proposed updates to the Fees Schedule 

in connection with the application (or 

rather exclusion) of fee programs to 

transactions in FLEX Micro Options are 

reasonable, equitable and not unfairly 

discriminatory. Particularly, the 

Exchange believes it is reasonable to 

exclude transactions in FLEX Micro 

Options from the: Liquidity Provider 

Sliding Scale, Liquidity Provider 

Sliding Scale Adjustment Table, 

Volume Incentive Program, Break-Up 

Credits, Affiliate Volume Plan, Clearing 

Trading Permit Holder Fee Cap, Floor 

Broker Sliding Scale Rebate Program, 

Program, and the ORS and CORS 

Programs in the same manner in which 

standard options on those same indices 

are excluded. The Exchange believes 

that excluding FLEX Micro Options 

transactions from certain fees programs 

is equitable and not unfairly 

discriminatory because the programs 

will equally not apply to, or exclude in 

the same manner, all market 

participants’ orders in FLEX Micro 

Options. The Exchange believes it’s 

reasonable, equitable and not unfairly 

discriminatory to exclude FLEX Micro 

transactions from the Marketing Fee and 

SCORe program as such programs 

similarly already exclude FLEX 

Options. Lastly, the Exchange believes 

it’s reasonable, equitable, and not 

unfairly discriminatory to exclude FLEX 

Micro Options from the SPX/SPXW and 

SPESG Liquidity Provider Sliding Scale, 

Clearing Trading Permit Holder 

Proprietary Products Sliding Scale, 

Customer Large Trade Discount, MarketMaker Tier Appointment Fee 

thresholds, Floor Broker Trading 

Surcharge thresholds, Floor Broker ADV 

Discount, Floor Brokerage Fees Discount 

Scale, Floor Brokerage Fees, Frequent 

Trader, and the GTH Executing Agent 

Subsidy because the Exchange is not 

obligated to include any particular 

product in such pricing programs, and 

the exclusion applies to all market 

participants uniformly. Moreover, the 

Exchange notes that the proposed rule 

change does not alter any of the existing 

program rates or volume calculations, 

but instead, merely proposes not to 

include transactions in FLEX Micro 

Options in those programs and volume 

calculations. 

The Exchange lastly believes the 

proposed updates to footnotes 18, 19 

and 20 of the Fees Schedule makes the 

footnotes easier to read, eliminates 

redundancy between the Rate Tables 

and the footnotes and alleviates 

potential confusion as to the 

applicability of AIM-related fees, 

thereby removing impediments to and 

perfecting the mechanism of a free and 

open market and a national market 

system, and, in general, protecting 

investors and the public interest. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange believes the proposed 

amendments to its Fee Schedule will 

not impose any burden on competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act. 

The Exchange does not believe that the 

proposed rule change will impose any 

burden on intramarket competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed FLEX Micro 

Options transaction fees for the separate 

types of market participants will be 

assessed automatically and uniformly to 

all similarly situated market 

participants. The Exchange again notes 

that there is a history in the options 

markets of providing preferential 

treatment to Customers, Market-Makers 

and Firms, as described above in the 

statutory basis section. Further, the 

proposed rule change will uniformly 

exclude all transactions in FLEX Micro 

Options from certain programs and fees/ 

surcharges as it currently does for many 

of the Exchange’s other proprietary 

products, including another product 

with a one multiplier (i.e., NANOS). 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on intermarket competition 

that is not necessary or appropriate in 

furtherance of the purposes of the Act 

because the proposed rule changes 

apply only to products exclusively 

listed on the Exchange. Additionally, 

the Exchange notes it operates in a 

highly competitive market. In addition 

to Cboe Options, TPHs have numerous 

alternative venues that they may 

participate on and director their order 

flow, including 15 other options 

exchanges, as well as off-exchange 

venues, where competitive products are 

available for trading. Based on publicly 

available information, no single options 

exchange has more than 16% of the 

market share of executed volume of 


jspears on DSK121TN23PROD with NOTICES1
42226 Federal Register / Vol. 87, No. 134 / Thursday, July 14, 2022 / Notices 

13See Cboe Global Markets, U.S. Options Market 

Volume Summary by Month (June 24, 2022), 

available at http://markets.cboe.com/us/options/ 

market_share/. 

14See Securities Exchange Act Release No. 51808 

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

15NetCoalition 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)). 

16 15 U.S.C. 78s(b)(3)(A). 17 17 CFR 240.19b–4(f). 

18 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). 

options trades.13 Therefore, no exchange 

possesses significant pricing power in 

the execution of option order flow. 

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.’’ 14 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’. . . .’’.15 Accordingly, the 

Exchange does not believe its proposed 

changes to the incentive programs 

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 has not solicited, and 

does not intend to solicit, comments on 

this proposed rule change. The 

Exchange has not received any written 

comments from members or other 

interested parties. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

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

of the Act 16 and paragraph (f) of Rule 

19b–4 17 thereunder. At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change should be approved or 

disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CBOE–2022–034 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CBOE–2022–034. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CBOE–2022–034 and 

should be submitted on or before 

August 4, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.18

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–14997 Filed 7–13–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–95229; File No. SR–C2– 

2022–013] 

Self-Regulatory Organizations; Cboe 

C2 Exchange, Inc.; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend Rule 5.20 To 

Remove Certain References to the 

Market-Wide Circuit Breaker Program 

July 8, 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 June 30, 

2022, Cboe C2 Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘C2’’) 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 ‘‘non-controversial’’ 

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 C2 Exchange, Inc. (the 

‘‘Exchange’’ or ‘‘C2’’) is filing with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) a proposal to 

amend Rule 5.20 to remove certain 

references to the Market-Wide Circuit 

Breaker program. The text of the 


jspears on DSK121TN23PROD with NOTICES1