Document ID: SEC-2018-0846-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe EDGA Exchange, Inc.
Posted Date: 2018-06-04T04:00Z

[Federal Register Volume 83, Number 107 (Monday, June 4, 2018)]
[Notices]
[Pages 25724-25725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-11865]

[[Page 25724]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83337; File No. SR-CboeEDGA-2018-009]

Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change Related 
to Fees for Use on Cboe EDGA Exchange, Inc.

May 29, 2018.
    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 21, 2018, Cboe EDGA Exchange, Inc. (``Exchange'' or ``EDGA'') 
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 Exchange has designated 
the proposed rule change as one establishing or changing a member due, 
fee, or other charge imposed by the Exchange under Section 
19(b)(3)(A)(ii) of the Act\3\ and Rule 19b-4(f)(2) thereunder,\4\ which 
renders the proposed rule change effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend the fee schedule applicable 
to Members \5\ and non-Members of the Exchange pursuant to EDGA Rules 
15.1(a) and (c).
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    \5\ The term ``Member'' is defined as ``any registered broker or 
dealer that has been admitted to membership in the Exchange.'' See 
Exchange Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's 
website at www.markets.cboe.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 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 parts of such 
statements.

(A) Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its fee schedule to (i) add an Add 
Volume Tier and (ii) increase the fee for orders that yield fee code 
D.\6\
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    \6\ The Exchange initially filed the proposed fee changes on May 
1, 2018 (SR-CboeEDGA-2018-006). On May 10, 2018, the Exchange 
withdrew that filing and submitted SR-CboeEDGA-2018-007. On May 21, 
2018 the Exchange withdrew that filing and submitted this filing.
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    Currently, the Exchange charges a standard rate of $0.0003 per 
share for orders that add liquidity for securities at or above $1.00 
that are appended with fee codes B, V Y, 3 or 4. The Exchange propose 
to adopt an Add Volume Tier, Tier 1 (new footnote 7) which would 
provide a reduced fee of $0.0002 per share for Members that add an ADV 
\7\ of greater than or equal to 0.22% of the TCV.\8\ The Exchange 
believes the proposed change will encourage Members to increase their 
liquidity on the Exchange. The Exchange also notes that other exchanges 
have similar volume tiers.\9\
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    \7\ ADV means average daily volume calculated as the number of 
shares added to, removed from, or routed by, the Exchange, or any 
combination or subset thereof, per day. ADV is calculated on a 
monthly basis. See Exchange's fee schedule.
    \8\ 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. See Exchange's fee schedule.
    \9\ See e.g., Cboe EDGX U.S. Equities Exchange Fee Schedule, 
Tape B Volume Tiers.
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    The Exchange next proposes to increase the fee for orders yielding 
fee code D, which results from an order routed to the New York Stock 
Exchange (``NYSE'') or routed using the RDOT routing strategy. 
Particularly, NYSE recently implemented certain pricing changes related 
to Tapes B and C securities, including adopting a per tape fee of 
$0.00280 per share to remove liquidity from the Exchange for member 
organizations with an Adding ADV of at least 50,000 shares for that 
respective Tape.\10\ Based on the changes in pricing at NYSE, the 
Exchange is proposing to increase its fee for orders executed at NYSE 
that yield fee code D from $0.00275 to $0.00280.
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    \10\ See NYSE Trader Update, NYSE--Fees for Trading Tapes B and 
C securities, dated April 2, 2018, available at https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Fee_Change_BandC_April2018.pdf.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\11\ in general, and 
furthers the objectives of Section 6(b)(4),\12\ 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.
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    \11\ 15 U.S.C. 78f.
    \12\ 15 U.S.C. 78f(b)(4).
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    In particular, the Exchange believes the addition of an Add Volume 
Tier under footnote 7 is reasonable because it provides Members an 
opportunity to receive a reduced rate for orders that add liquidity and 
is a reasonable means to encourage Members to increase their liquidity 
on the Exchange. The Exchange further believes that the proposed tier 
represents an equitable allocation of reasonable dues, fees, and other 
charges because the thresholds necessary to achieve the tier encourages 
Members to add additional liquidity to the Exchange. The Exchange also 
notes that other exchanges utilize similar volume tiers with similar 
criteria.\13\ The Exchange further believes the proposed fee change is 
equitable and non-discriminatory because it applies uniformly to all 
Members.
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    \13\ See e.g., Cboe EDGX U.S. Equities Exchange Fee Schedule, 
Tape B Volume Tiers.
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    The Exchange believes the proposed increase to orders yielding fee 
code D is reasonable because it reflects a pass-through of the pricing 
increase by NYSE noted above. The Exchange further believes the 
proposed fee change is equitable and non-discriminatory because it 
applies uniformly to all Members.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    This proposed rule change does 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 changes 
represent a significant departure from previous pricing offered by the 
Exchange or from pricing offered by the Exchange's competitors. 
Additionally, Members may opt to disfavor the Exchange's pricing if 
they believe that alternatives offer them better value. Accordingly, 
the Exchange does not believe that the proposed changes will impair the 
ability of Members or competing venues to maintain their competitive 
standing in the financial markets. The Exchange

[[Page 25725]]

believes that its proposal would not burden intramarket competition 
because the proposed rates would apply uniformly to all Members.

(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 \14\ and paragraph (f) of Rule 19b-4 
thereunder.\15\ 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.
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    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 17 CFR 240.19b-4(f).
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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 [email protected]. Please include 
File Number SR-CboeEDGA-2018-009 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-CboeEDGA-2018-009. 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-CboeEDGA-2018-009 and should be 
submitted on or before June 25, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
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    \16\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-11865 Filed 6-1-18; 8:45 am]
 BILLING CODE 8011-01-P