Document ID: SEC-2020-2023-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Nasdaq BX, Inc.
Posted Date: 2020-12-18T05:00Z

[Federal Register Volume 85, Number 244 (Friday, December 18, 2020)]
[Notices]
[Pages 82541-82553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-27838]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90655; File No. SR-BX-2020-037]

Self-Regulatory Organizations; Nasdaq BX, Inc.; Notice of Filing 
of Proposed Rule Change To Amend BX Options 7, Section 2 and Section 3

December 14, 2020.
    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 December 1, 2020, Nasdaq BX, Inc. (``BX'' or ``Exchange'') 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend BX Options 7, Section 2, ``BX 
Options Market--Fees and Rebates,'' and Options 7, Section 3, ``BX 
Options Market--Ports and other Services.''
    The text of the proposed rule change is available on the Exchange's 
website at https://listingcenter.nasdaq.com/rulebook/bx/rules, 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 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 BX's Pricing Schedule at Options 7, 
Section 2, ``BX Options Market--Fees and Rebates,'' and Options 7, 
Section 3, ``BX Options Market--Ports and other Services.'' Each change 
will be described in detail below.
Options 7, Section 2
    The Exchange proposes to remove the options tier schedules 
applicable to Select Symbols \3\ and SPY pricing. With this proposal, 
all pricing within Options 7, Section 2 would be subject to either the 
Penny Symbol or Non-Penny Symbol pricing tier schedules.
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    \3\ The following are current Select Symbols within Options 7, 
Section 2: ASHR, DIA, DXJ, EEM, EFA, EWJ, EWT, EWW, EWY, EWZ, FAS, 
FAZ, FXE, FXI, FXP, GDX, GLD, HYG, IWM, IYR, KRE, OIH, QID, QLD, 
QQQ, RSX, SDS, SKF, SLV, SRS, SSO, TBT, TLT, TNA, TZA, UNG, URE, 
USO, UUP, UVXY, UYG, VXX, XHB, XLB, XLE, XLF, XLI, XLK, XLP, XLU, 
XLV, XLY, XME, XOP, XRT.
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    Today, the Exchange assesses fees and rebates for Penny Symbols and 
Non-Penny Symbols, excluding Select Symbols and SPY. Today, both Select 
Symbols and options overlying ``SPY'' are subject to alternative 
pricing as detailed below.
    Today, the Exchange assesses fees and pays rebates for Penny and 
Non-Penny Symbols in accordance with the below table and corresponding 
Penny and Non-Penny tier schedules.

                                                Fees and Rebates
                                             [per executed contract]
----------------------------------------------------------------------------------------------------------------
                                                                    BX options     Non- customer
                                                     Customer      market maker         \1\            Firm
----------------------------------------------------------------------------------------------------------------
Penny Symbols (Excluding Options in Select
 Symbols):
    Rebate to Add Liquidity.....................               #       \2\ $0.10             N/A             N/A
    Fee to Add Liquidity........................               #        \3\ 0.39           $0.45           $0.45
    Rebate to Remove Liquidity..................               #             N/A             N/A             N/A
    Fee to Remove Liquidity.....................             N/A               #            0.46            0.46
Non-Penny Symbols:
    Rebate to Add Liquidity.....................               *             N/A             N/A             N/A
    Fee to Add Liquidity........................               *   \5\ 0.50/0.95            0.98            0.98
    Rebate to Remove Liquidity..................               *             N/A             N/A             N/A
    Fee to Remove Liquidity.....................             N/A               *            0.89            0.89
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[[Page 82542]]

                                          # Penny Symbols Tier Schedule
                                       [Excluding select symbols options]
----------------------------------------------------------------------------------------------------------------
                                                                    Rebate  to
                                  Rebate to  add    Fee to  add       remove      Fee  to remove  Fee  to remove
                                     liquidity       liquidity       liquidity       liquidity       liquidity
----------------------------------------------------------------------------------------------------------------
When:                                   Customer        Customer        Customer      BX options      BX options
                                                                                          market          market
                                                                                           maker           maker
----------------------------------------------------------------------------------------------------------------
Trading with:                       Non-customer        Customer   Non-customer,        Customer   Non-customer,
                                      BX options                      BX options                      BX options
                                   market maker,                   market maker,                   market maker,
                                         or firm                    customer, or                         or firm
                                                                            firm
----------------------------------------------------------------------------------------------------------------
Tier 1. Participant executes               $0.00           $0.39           $0.00           $0.39           $0.46
 less than 0.05% of total
 industry customer equity and
 ETF option ADV contracts per
 month..........................
Tier 2. Participant executes                0.10            0.39            0.25            0.39            0.46
 0.05% to less than 0.15% of
 total industry customer equity
 and ETF option ADV contracts
 per month......................
Tier 3. Participant executes                0.20            0.39            0.35            0.30            0.46
 0.15% or more of total industry
 customer equity and ETF option
 ADV contracts per month........
----------------------------------------------------------------------------------------------------------------

                                        * Non-Penny Symbols Tier Schedule
----------------------------------------------------------------------------------------------------------------
                                                                    Rebate  to
                                  Rebate to  add    Fee to  add       remove      Fee  to remove  Fee  to remove
                                     liquidity       liquidity       liquidity       liquidity       liquidity
----------------------------------------------------------------------------------------------------------------
When:                                   Customer        Customer        Customer      BX options      BX options
                                                                                          market          market
                                                                                           maker           maker
----------------------------------------------------------------------------------------------------------------
Trading with:                       Non-customer        Customer   Non-customer,        Customer   Non-customer,
                                      BX options                      BX options                      BX options
                                   market maker,                   market maker,                   market maker,
                                         or firm                    customer, or                         or firm
                                                                            firm
----------------------------------------------------------------------------------------------------------------
Tier 1. Participant executes               $0.00           $0.85           $0.80           $0.89           $0.89
 less than 0.05% of total
 industry customer equity and
 ETF option ADV contracts per
 month..........................
Tier 2. Participant executes                0.10            0.85            0.80            0.89            0.89
 0.05% to less than 0.15% of
 total industry customer equity
 and ETF option ADV contracts
 per month......................
Tier 3. Participant executes                0.20            0.85            0.80            0.60            0.89
 0.15% or more of total industry
 customer equity and ETF option
 ADV contracts per month........
----------------------------------------------------------------------------------------------------------------

Select Symbols
    With respect to Select Symbols Options, the following tier schedule 
\4\ applies today:
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    \4\ Volume from all products listed on BX Options applies to the 
Select Symbols Options Tiers.

[[Page 82543]]

                                      Select Symbols Options Tier Schedule
----------------------------------------------------------------------------------------------------------------
                                                                    Rebate  to
                                  Rebate to  add    Fee to  add       remove      Fee  to remove  Fee  to remove
                                     liquidity       liquidity       liquidity       liquidity       liquidity
----------------------------------------------------------------------------------------------------------------
When:                                   Customer        Customer        Customer      BX options      BX options
                                                                                          market          market
                                                                                           maker           maker
----------------------------------------------------------------------------------------------------------------
Trading with:                       Non-customer        Customer   Non-customer,        Customer   Non-customer,
                                      BX options                      BX options                      BX options
                                   market maker,                   market maker,                   market maker,
                                         or firm                    customer, or                         or firm
                                                                            firm
----------------------------------------------------------------------------------------------------------------
Tier 1. Participant executes               $0.00           $0.44           $0.00           $0.42           $0.14
 less than 0.05% of total
 industry customer equity and
 ETF option ADV contracts per
 month..........................
Tier 2. Participant executes                0.10            0.44            0.25            0.42            0.10
 0.05% to less than 0.15% of
 total industry customer equity
 and ETF option ADV contracts
 per month......................
Tier 3. Participant executes                0.20            0.40            0.37            0.39            0.04
 0.15% or more of total industry
 customer equity and ETF option
 ADV contracts per month........
Tier 4. Participant executes                0.25            0.29            0.37            0.25            0.00
 greater than 10,000 PRISM
 Agency Contracts per month; or
 Participant executes BX Options
 Market Maker volume of 0.30% or
 more of total industry customer
 equity and ETF options ADV per
 month..........................
----------------------------------------------------------------------------------------------------------------

    The Exchange proposes to remove the Select Symbols Options Tier 
Schedule and corresponding notes and instead assess each Select Symbol 
as either a Penny \5\ or Non-Penny Symbol.
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    \5\ Penny Symbols must comply with the requirements for the 
Penny Interval Program within Supplementary Material .01 to Options 
3, Section 3.
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    Among the Select Symbols noted within Options 7, Section 2, the 
following are Penny Symbols: ASHR, DIA, EEM, EFA, EWJ, EWW, EWY, EWZ, 
FAS, FXI, GDX, GLD, HYG, IWM, IYR, KRE, OIH, QQQ, RSX, SDS, SLV, SSO, 
TBT, TLT, TNA, UNG, USO, UUP, UVXY, VXX, XLB, XLE, XLF, XLI, XLK, XLP, 
XLU, XLV, XLY, XME, XOP, and XRT. Among the Select Symbols noted within 
Options 7, Section 2, the following are Non-Penny Symbols: DXJ, EWT, 
FAZ, FXE, FXP, QID, QLD, SKF, SRS, SSO, TZA, URE, UYG, and XHB.
Select Symbols to be Priced as Penny Symbols
    With respect to the impact on pricing for the above-referenced 
Select Symbols,\6\ which would be priced as Penny Symbols with this 
proposal, the Exchange notes the below changes in pricing.
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    \6\ Among the Select Symbols noted within Options 7, Section 2, 
the following are Penny Symbols: ASHR, DIA, EEM, EFA, EWJ, EWW, EWY, 
EWZ, FAS, FXI, GDX, GLD, HYG, IWM, IYR, KRE, OIH, QQQ, RSX, SDS, 
SLV, SSO, TBT, TLT, TNA, UNG, USO, UUP, UVXY, VXX, XLB, XLE, XLF, 
XLI, XLK, XLP, XLU, XLV, XLY, XME, XOP, and XRT.
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Customers
    Today, Customers are paid Rebates to Add Liquidity in Select 
Symbols when trading against Non-Customers, BX Options Market Makers or 
Firms which range from $0.00 to $0.25 per contract.\7\ Today, Customers 
are paid a Rebate to Remove Liquidity in Select Symbols when trading 
against Non-Customers, BX Options Market Makers, Customers or Firms 
which range from $0.00 to $0.37 per contract.\8\ Today, the Customer 
Fee to Add Liquidity in Select Symbols when contra to another Customer 
is $0.33 per contract.
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    \7\ Participants that executes less than 0.05% of total industry 
customer equity and ETF option ADV contracts per month receive no 
Select Symbol Rebate to Add Liquidity for Tier 1. Participants that 
executes 0.05% to less than 0.15% of total industry customer equity 
and ETF option ADV contracts per month receive a $0.10 per contract 
Select Symbol Rebate to Add Liquidity for Tier 2. Participants that 
execute 0.15% or more of total industry customer equity and ETF 
option ADV contracts per month receive a $0.20 per contract Select 
Symbol Rebate to Add Liquidity for Tier 3. Participants that execute 
greater than 10,000 PRISM Agency Contracts per month; or Participant 
executes BX Options Market Maker volume of 0.30% or more of total 
industry customer equity and ETF options ADV per month receive a 
$0.25 per contract Select Symbol Rebate to Add Liquidity for Tier 4.
    \8\ Participants that executes less than 0.05% of total industry 
customer equity and ETF option ADV contracts per month receive no 
Select Symbol Rebate to Remove Liquidity for Tier 1. Participants 
that executes 0.05% to less than 0.15% of total industry customer 
equity and ETF option ADV contracts per month receive a $0.25 per 
contract Select Symbol Rebate to Remove Liquidity for Tier 2. 
Participants that execute 0.15% or more of total industry customer 
equity and ETF option ADV contracts per month receive a $0.37 per 
contract Select Symbol Rebate to Remove Liquidity for Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month receive a $0.37 per contract Select Symbol Rebate to 
Remove Liquidity for Tier 4.
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    With this proposal, Customers would receive a Penny Symbol Rebate 
to Add Liquidity when trading against a Non-Customer, BX Options Market 
Maker or Firm which ranges from $0.00 to $0.20 per contract.\9\ With 
this proposal, Customers would receive a Penny Symbol Rebate to Remove 
Liquidity when trading against a Non-Customer, BX Options Market Maker, 
Customer or Firm which ranges from $0.00 to $0.35 per contract.\10\ 
With this proposal,

[[Page 82544]]

Customers would pay a Penny Symbol Fee to Add Liquidity when trading 
against a Customer of $0.39 per contract, regardless of the tier.\11\ 
With this proposal, Customers would not pay a Penny Symbol Fee to 
Remove Liquidity.
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    \9\ Participants that executes less than 0.05% of total industry 
customer equity and ETF option ADV contracts per month would receive 
no Penny Symbol Rebate to Add Liquidity in Tier 1. Participants that 
execute 0.05% to less than 0.15% of total industry customer equity 
and ETF option ADV contracts per month would receive a $0.10 per 
contract Penny Symbol Rebate to Add Liquidity in Tier 2. 
Participants that execute 0.15% or more of total industry customer 
equity and ETF option ADV contracts per month would receive a $0.20 
per contract Penny Symbol Rebate to Add Liquidity in Tier 3.
    \10\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive no Penny Symbol Rebate to Remove Liquidity in Tier 1. 
Participants that execute 0.05% to less than 0.15% of total industry 
customer equity and ETF option ADV contracts per month would receive 
a $0.25 per contract Penny Symbol Rebate to Remove Liquidity in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month will would 
receive a $0.35 per contract Penny Symbol Rebate to Remove Liquidity 
in Tier 3.
    \11\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a $0.39 per contract Penny Symbol Fee to Add Liquidity in 
Tier 1. Participants that execute 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a $0.39 per contract Penny Symbol Fee to Add Liquidity in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month would pay a 
$0.39 per contract Penny Symbol Fee to Add Liquidity in Tier 3.
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BX Options Market Makers
    Today, BX Options Market Makers pay a Fee to Add Liquidity in 
Select Symbols when trading against a Customer which ranges from $0.44 
to $0.29 per contract.\12\ Today, BX Options Market Makers pay a Fee to 
Remove Liquidity in Select Symbols when trading against a Customer 
which ranges from $0.42 to $0.25 per contract.\13\ Today, BX Options 
Market Makers pay a Fee to Remove Liquidity in Select Symbols when 
trading against a Firm, Non-Customer, or BX Options Market Maker of 
$0.46 per contract. Today, BX Options Market Makers pay a Fee to Add 
Liquidity in Select Symbols when trading against a Non-Customer, BX 
Options Market Maker or Firm which ranges from $0.14 to $0.00 per 
contract.\14\
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    \12\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.44 per contract in Tier 
1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.44 per contract in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Add Liquidity of $0.40 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay a Select Symbol Fee to Add Liquidity of $0.29 per 
contract in Tier 4.
    \13\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Remove Liquidity of $0.42 per contract in 
Tier 1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Remove Liquidity of $0.42 per contract in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Remove Liquidity of $0.39 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay a Select Symbol Fee to Remove Liquidity of $0.25 per 
contract in Tier 4.
    \14\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.14 per contract in Tier 
1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.10 per contract in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Add Liquidity of $0.04 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay no Select Symbol Fee to Add Liquidity in Tier 4.
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    With this proposal, BX Options Market Makers would receive a Penny 
Symbol Rebate to Add Liquidity of $0.10 per contract only when the BX 
Options Market Maker is contra to a Non-Customer, Firm, or BX Options 
Market Maker. With this proposal, BX Options Market Makers would 
receive no Penny Symbol Rebate to Remove Liquidity. With this proposal, 
BX Options Market Makers would pay a $0.39 per contract Penny Symbol 
Fee to Add Liquidity only when the BX Options Market Maker is contra to 
a Customer. With this proposal, BX Options Market Makers would pay a 
Penny Symbol Fee to Remove Liquidity when trading against a Customer 
which ranges from $0.39 to $0.30 per contract.\15\ With this proposal, 
BX Options Market Makers would pay a Penny Symbol Fee to Remove 
Liquidity when trading against a Non-Customer, BX Options Market Maker 
or Firm of $0.46 per contract, regardless of the tier.\16\
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    \15\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Penny Symbol Fee to Remove Liquidity of $0.39 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Penny Symbol Fee to Remove Liquidity of $0.39 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Penny Symbol Fee to Remove Liquidity of $0.30 per 
contract in Tier 3.
    \16\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Penny Symbol Fee to Remove Liquidity of $0.46 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per 
contract in Tier 3.
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Non-Customers
    Today, Non-Customers pay a Fee to Add Liquidity and a Fee to Remove 
Liquidity in Select Symbols of $0.46 per contract, regardless of 
counterparty. Today, Non-Customers receive no Select Symbol rebates.
    With this proposal, Non-Customers would receive no Penny Symbol 
Rebate to Add Liquidity and no Penny Symbol Rebate to Remove Liquidity. 
With this proposal, Non-Customers would pay a Penny Symbol Fee to Add 
Liquidity of $0.45 per contract. With this proposal, Non-Customers 
would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per contract.
Firms
    Today, Firms pay a Select Symbol Fee to Add Liquidity and a Fee to 
Remove Liquidity of $0.37 per contract, regardless of counterparty. 
Today, Firms receive no Select Symbol rebates.
    With this proposal, Firms would receive no Penny Symbol Rebate to 
Add Liquidity and no Penny Symbol Rebate to Remove Liquidity. With this 
proposal, Firms would pay a Penny Symbol Fee to Add Liquidity of $0.45 
per contract. With this proposal, Firms would pay a Penny Symbol Fee to 
Remove Liquidity of $0.46 per contract.
Select Symbols To Be Priced as Non-Penny Symbols
    With respect to the impact on pricing for Select Symbols which 
would be priced as Non-Penny Symbols (DXJ, EWT, FAZ, FXE, FXP, QID, 
QLD, SKF, SRS, SSO, TZA, URE, UYG, and XHB) with this proposal, the 
Exchange notes the below changes in pricing.
Customers
    Today, Customers are paid Rebates to Add Liquidity in Select 
Symbols when trading against Non-Customers, BX Options Market Makers or 
Firms which range from $0.00 to $0.25 per contract.\17\ Today, 
Customers are paid a Rebate to Remove Liquidity in Select Symbols when 
trading against Non-Customers, BX Options Market Makers, Customers or 
Firms which range from $0.00 to

[[Page 82545]]

$0.37 per contract.\18\ Today, the Customer Fee to Add Liquidity in 
Select Symbols when contra to another Customer is $0.33 per contract.
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    \17\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
receive no Select Symbol Rebate to Add Liquidity for Tier 1. 
Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
receive a $0.10 per contract Select Symbol Rebate to Add Liquidity 
for Tier 2. Participants that execute 0.15% or more of total 
industry customer equity and ETF option ADV contracts per month 
receive a $0.20 per contract Select Symbol Rebate to Add Liquidity 
for Tier 3. Participants that execute greater than 10,000 PRISM 
Agency Contracts per month; or Participant executes BX Options 
Market Maker volume of 0.30% or more of total industry customer 
equity and ETF options ADV per month receive a $0.25 per contract 
Select Symbol Rebate to Add Liquidity for Tier 4.
    \18\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
receive no Select Symbol Rebate to Remove Liquidity for Tier 1. 
Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
receive a $0.25 per contract Select Symbol Rebate to Remove 
Liquidity for Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month receive a $0.37 per contract Select Symbol Rebate to Remove 
Liquidity for Tier 3. Participants that execute greater than 10,000 
PRISM Agency Contracts per month; or Participant executes BX Options 
Market Maker volume of 0.30% or more of total industry customer 
equity and ETF options ADV per month receive a $0.37 per contract 
Select Symbol Rebate to Remove Liquidity for Tier 4.
---------------------------------------------------------------------------

    With this proposal, Customers would receive a Non-Penny Symbol 
Rebate to Add Liquidity when trading against a Non-Customer, BX Options 
Market Maker or Firm which ranges from $0.00 to $0.20 per contract.\19\ 
With this proposal, Customers would receive a Non-Penny Symbol Rebate 
to Remove Liquidity when trading against a Non-Customer, BX Options 
Market Maker, Customer or Firm of $0.80 per contract, regardless of the 
tier.\20\ With this proposal, Customers would pay a Non-Penny Symbol 
Fee to Add Liquidity when trading against a Customer of $0.85 per 
contract, regardless of the tier.\21\ With this proposal, Customers 
would not pay a Non-Penny Symbol Fee to Remove Liquidity.
---------------------------------------------------------------------------

    \19\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive no Non-Penny Symbol Rebate to Add Liquidity in Tier 1. 
Participants that execute 0.05% to less than 0.15% of total industry 
customer equity and ETF option ADV contracts per month would receive 
a $0.10 per contract Non-Penny Symbol Rebate to Add Liquidity in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month will would 
receive a $0.20 per contract Non-Penny Symbol Rebate to Add 
Liquidity in Tier 3.
    \20\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive a Non-Penny Symbol Rebate to Remove Liquidity of $0.80 
per contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would receive a Non-Penny Symbol Rebate to Remove 
Liquidity of $0.80 per contract in Tier 2. Participants that execute 
0.15% or more of total industry customer equity and ETF option ADV 
contracts per month would receive a Non-Penny Symbol Rebate to 
Remove Liquidity of $0.80 per contract in Tier 3.
    \21\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Non-Penny Symbol Fee to Add Liquidity of $0.85 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Add Liquidity of $0.85 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Non-Penny Symbol Fee to Add Liquidity of $0.85 per 
contract in Tier 3.
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BX Options Market Makers
    Today, BX Options Market Makers pay a Fee to Add Liquidity in 
Select Symbols when trading against a Customer which ranges from $0.44 
to $0.29 per contract.\22\ Today, BX Options Market Makers pay a Fee to 
Remove Liquidity in Select Symbols when trading against a Customer 
which ranges from $0.42 to $0.25 per contract.\23\ Today, BX Options 
Market Makers pay a Fee to Remove Liquidity in Select Symbols when 
trading against a Firm, Non-Customer, or BX Options Market Maker of 
$0.46 per contract. Today, BX Options Market Makers pay a Fee to Add 
Liquidity in Select Symbols when trading against a Non-Customer, BX 
Options Market Maker or Firm which ranges from $0.14 to $0.00 per 
contract.\24\
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    \22\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.44 per contract in Tier 
1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.44 per contract in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Add Liquidity of $0.40 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay a Select Symbol Fee to Add Liquidity of $0.29 per 
contract in Tier 4.
    \23\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Remove Liquidity of $0.42 per contract in 
Tier 1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Remove Liquidity of $0.42 per contract in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Remove Liquidity of $0.39 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay a Select Symbol Fee to Remove Liquidity of $0.25 per 
contract in Tier 4.
    \24\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.14 per contract in Tier 
1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.10 per contract in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Add Liquidity of $0.04 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay no Select Symbol Fee to Add Liquidity in Tier 4.
---------------------------------------------------------------------------

    With this proposal, BX Options Market Makers would receive no Non-
Penny Symbol Rebate to Add Liquidity or Non-Penny Rebate to Remove 
Liquidity. With this proposal, BX Options Market Makers would pay a 
$0.50 per contract Non-Penny Symbol Fee to Add Liquidity when trading 
against a BX Options Market Maker, Non-Customer or Firm and a $0.95 per 
contract Non-Penny Symbol Fee to Add Liquidity when trading against a 
Customer. With this proposal, BX Options Market Makers would pay a Non-
Penny Symbol Fee to Remove Liquidity when trading against a Customer 
which ranges from $0.89 to $0.60 per contract.\25\ With this proposal, 
BX Options Market Makers would pay a Non-Penny Symbol Fee to Remove 
Liquidity when trading against a Non-Customer, BX Options Market Maker, 
or Firm of $0.89 per contract, regardless of the tier.\26\
---------------------------------------------------------------------------

    \25\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Non-Penny Symbol Fee to Remove Liquidity of $0.89 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Remove Liquidity of 
$0.89 per contract in Tier 2. Participants that execute 0.15% or 
more of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Remove Liquidity of 
$0.60 per contract in Tier 3.
    \26\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Non-Penny Symbol Fee to Remove Liquidity of $0.89 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Remove Liquidity of 
$0.89 per contract in Tier 2. Participants that execute 0.15% or 
more of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Remove Liquidity of 
$0.89 per contract in Tier 3.
---------------------------------------------------------------------------

Non-Customers
    Today, Non-Customers pay a Fee to Add Liquidity and a Fee to Remove 
Liquidity in Select Symbols of $0.46 per contract, regardless of 
counterparty. Today, Non-Customers receive no Select Symbol rebates.
    With this proposal, Non-Customers would receive no Non-Penny Symbol 
Rebate to Add Liquidity or Non-Penny Symbol Rebate to Remove Liquidity. 
With this proposal, Non-Customers would pay a Non-Penny Symbol Fee to 
Add Liquidity of $0.98 per contract. With this proposal, Non-Customers 
would pay a Non-Penny Symbol Fee to Remove Liquidity of $0.89 per 
contract.

[[Page 82546]]

Firms

    Today, Firms pay a Select Symbol Fee to Add Liquidity and a Fee to 
Remove Liquidity of $0.37 per contract, regardless of counterparty. 
Today, Firms receive no Select Symbol rebates.
    With this proposal, Firms would receive no Non-Penny Symbol Rebate 
to Add Liquidity or Non-Penny Symbol Rebate to Remove Liquidity. With 
this proposal, Firms would pay a Non-Penny Symbol Fee to Add Liquidity 
of $0.98 per contract. With this proposal, Firms would pay a Non-Penny 
Symbol Fee to Remove Liquidity of $0.89 per contract.
SPY
    Today, the SPY Options Tier Schedule is as follows:

                        SPY Options Tier Schedule
------------------------------------------------------------------------
                                             Rebate to remove liquidity
                                                   (per contract)
------------------------------------------------------------------------
Applied to:                                                     Customer
------------------------------------------------------------------------
Trading with:                                   Non-customer, BX options
                                                 market maker, customer,
                                                                 or firm
------------------------------------------------------------------------
Tier 1. Participant removes less than 500                          $0.01
 SPY Options contracts per day in the
 customer range...........................
Tier 2. Participant removes 500 to not                              0.10
 more than 999 SPY Options contracts per
 day in the customer range................
Tier 3. Participant removes 1000 to not                             0.35
 more than 1999 SPY Options contracts per
 day in the customer range................
Tier 4. Participant removes 2000 to not                             0.43
 more than 3999 SPY Options contracts per
 day in the customer range................
Tier 5. Participant removes more than 3999                          0.52
 SPY Options contracts per day in the
 customer range...........................
------------------------------------------------------------------------

    With respect to the impact on pricing for SPY, with this proposal, 
SPY would be priced as a Penny Symbol the Exchange notes the below 
changes in pricing.
Customers
    Today, SPY pays Customer Rebates to Remove Liquidity ranging from 
$0.01 to $0.52 per contracts when trading against a Non-Customer, BX 
Options Market Maker, Customer or Firm.\27\ Today, Customers pay SPY 
Fees to Add Liquidity of $0.38 per contract when contra to another 
Customer. Today, Customers pay no SPY fee or receive a SPY rebate for 
Customer SPY Options that add liquidity when contra to a Firm, BX 
Options Market Maker or Non-Customer.
---------------------------------------------------------------------------

    \27\ Tier 1 Participants that remove less than 500 SPY Options 
contracts per day in the customer range receive a $0.01 per contract 
rebate. Tier 2 Participants that remove 500 to not more than 999 SPY 
Options contracts per day in the customer range receive a $0.10 per 
contract rebate. Tier 3 Participants that removes 1000 to not more 
than 1999 SPY Options contracts per day in the customer range 
receive a $0.35 per contract rebate. Tier 4 Participants that remove 
2000 to not more than 3999 SPY Options contracts per day in the 
customer range receive a $0.43 per contract rebate. Tier 5 
Participants that remove more than 3999 SPY Options contracts per 
day in the customer range receive a $0.52 per contract rebate.
---------------------------------------------------------------------------

    With this proposal, Customers would receive a Penny Symbol Rebate 
to Add Liquidity when trading against a Non-Customer, BX Options Market 
Maker or Firm which ranges from $0.00 to $0.20 per contract.\28\ With 
this proposal, Customers would receive a Penny Symbol Rebate to Remove 
Liquidity when trading against a Non-Customer, BX Options Market Maker, 
Customer or Firm which ranges from $0.00 to $0.35 per contract.\29\ 
With this proposal, Customers would pay a Penny Symbol Fee to Add 
Liquidity when trading against a Customer of $0.39 per contract, 
regardless of the tier.\30\ With this proposal, Customers would not pay 
a Penny Symbol Fee to Remove Liquidity.
---------------------------------------------------------------------------

    \28\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive no Penny Symbol Rebate to Add Liquidity in Tier 1. 
Participants that execute 0.05% to less than 0.15% of total industry 
customer equity and ETF option ADV contracts per month would receive 
a $0.10 per contract Penny Symbol Rebate to Add Liquidity in Tier 2. 
Participants that execute 0.15% or more of total industry customer 
equity and ETF option ADV contracts per month would receive a $0.20 
per contract Penny Symbol Rebate to Add Liquidity in Tier 3.
    \29\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive no Penny Symbol Rebate to Remove Liquidity in Tier 1. 
Participants that execute 0.05% to less than 0.15% of total industry 
customer equity and ETF option ADV contracts per month would receive 
a $0.25 per contract Penny Symbol Rebate to Remove Liquidity in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month will would 
receive a $0.35 per contract Penny Symbol Rebate to Remove Liquidity 
in Tier 3.
    \30\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a $0.39 per contract Penny Symbol Fee to Add Liquidity in 
Tier 1. Participants that execute 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a $0.39 per contract Penny Symbol Fee to Add Liquidity in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month would pay a 
$0.39 per contract Penny Symbol Fee to Add Liquidity in Tier 3.
---------------------------------------------------------------------------

BX Options Market Makers
    Today, with SPY, BX Options Marker Makers are paid no rebates. BX 
Options Market Makers pay a SPY Fee to Remove Liquidity of $0.44 per 
contract when trading against a Firm, Non-Customer, or BX Options 
Market Maker. Today, BX Options Market Makers pay a SPY Fee to Add 
Liquidity and a SPY Fee to Remove Liquidity of $0.39 per contract when 
trading against a Customer. Finally, today, BX Options Market Makers 
pay a SPY Fee to Add Liquidity of $0.14 per contract when trading 
against a Firm, BX Options Market Maker or Non Customer.
    With this proposal, BX Options Market Makers would receive a Penny 
Symbol Rebate to Add Liquidity of $0.10 per contract only when the BX 
Options Market Maker is contra to a Non-Customer, Firm, or BX Options 
Market Maker. With this proposal, BX Options Market Makers would 
receive no Penny Symbol Rebate to Remove Liquidity. With this proposal, 
BX Options Market Makers would pay a $0.39 per contract Penny Symbol 
Fee to Add Liquidity only when the BX Options Market Maker is contra to 
a Customer. With this proposal, BX Options Market Makers would pay a 
Penny Symbol Fee to Remove Liquidity when trading against a Customer 
which ranges from $0.39 to $0.30 per contract.\31\ With this proposal, 
BX Options Market Makers would pay a Penny Symbol Fee to Remove 
Liquidity when trading against a Non-Customer,

[[Page 82547]]

BX Options Market Maker or Firm of $0.46 per contract, regardless of 
the tier.\32\
---------------------------------------------------------------------------

    \31\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Penny Symbol Fee to Remove Liquidity of $0.39 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Penny Symbol Fee to Remove Liquidity of $0.39 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Penny Symbol Fee to Remove Liquidity of $0.30 per 
contract in Tier 3.
    \32\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Penny Symbol Fee to Remove Liquidity of $0.46 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per 
contract in Tier 3.
---------------------------------------------------------------------------

Non-Customers
    Today, Non-Customers pay a SPY Fee to Add Liquidity and a SPY Fee 
to Remove Liquidity of $0.44 per contract, regardless of counterparty. 
Today, Non-Customers receive no SPY rebates.
    With this proposal, Non-Customers would receive no Penny Symbol 
Rebate to Add Liquidity and no Penny Symbol Rebate to Remove Liquidity. 
With this proposal, Non-Customers would pay a Penny Symbol Fee to Add 
Liquidity of $0.45 per contract. With this proposal, Non-Customers 
would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per contract.
Firms
    Today, Firms pay a SPY Fee to Add Liquidity and a SPY Fee to Remove 
Liquidity of $0.41 per contract, regardless of counterparty. Today, 
Firms receive no SPY rebates.
    With this proposal, Firms would receive no Penny Symbol Rebate to 
Add Liquidity and no Penny Symbol Rebate to Remove Liquidity. With this 
proposal, Firms would pay a Penny Symbol Fee to Add Liquidity of $0.45 
per contract. With this proposal, Firms would pay a Penny Symbol Fee to 
Remove Liquidity of $0.46 per contract.
    The Exchange believes that this proposal will simplify its 
transaction fees and rebates by classifying pricing for all options 
symbols as either Penny or Non-Penny Symbols.
Technical Amendments
    The Exchange proposes to remove footnote 4, which is currently 
reserved, and renumber current footnote 5 as new footnote 4 within 
Options 7, Section 2. The Exchange also proposes to remove ``(excluding 
Select Symbols Options)'' from the Fees and Rebates table within 
Options 7, Section 2(1) and from the Penny Symbols Tier Schedule title 
as that exclusion is no longer necessary because this proposal removes 
that pricing.
Options 7, Section 3
    The Exchange proposes to amend Options 7, Section 3, ``BX Options 
Market--Ports and other Services,'' to remove obsolete text which 
reflects timeframes which have passed.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\33\ in general, and furthers the objectives of 
Sections 6(b)(4) and 6(b)(5) of the Act,\34\ in particular, in that it 
provides for the equitable allocation of reasonable dues, fees, and 
other charges among members and issuers and other persons using any 
facility, and is not designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \33\ 15 U.S.C. 78 f(b).
    \34\ 15 U.S.C. 78f(b)(4) and (5).
---------------------------------------------------------------------------

    The Exchange's proposed changes to its Pricing Schedule are 
reasonable in several respects. As a threshold matter, the Exchange is 
subject to significant competitive forces in the market for options 
securities transaction services that constrain its pricing 
determinations in that market. The fact that this market is competitive 
has 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 broker-dealers 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'. . ..'' \35\
---------------------------------------------------------------------------

    \35\ NetCoalition v. SEC, 615 F.3d 525, 539 (DC Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
---------------------------------------------------------------------------

    The Commission and the courts have repeatedly expressed their 
preference for competition over regulatory intervention in determining 
prices, products, and services in the securities markets. In Regulation 
NMS, while adopting a series of steps to improve the current market 
model, 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.'' \36\
---------------------------------------------------------------------------

    \36\ Securities Exchange Act Release No. 51808 (June 9, 2005), 
70 FR 37496, 37499 (June 29, 2005) (``Regulation NMS Adopting 
Release'').
---------------------------------------------------------------------------

    Numerous indicia demonstrate the competitive nature of this market. 
For example, clear substitutes to the Exchange exist in the market for 
options security transaction services. The Exchange is only one of 
sixteen options exchanges to which market participants may direct their 
order flow. Within this environment, market participants can freely and 
often do shift their order flow among the Exchange and competing venues 
in response to changes in their respective pricing schedules. As such, 
the proposal represents a reasonable attempt by the Exchange to 
increase its liquidity and market share relative to its competitors.
Options 7, Section 2
Select Symbols To Be Priced as Penny Symbols
    With respect to pricing certain Select Symbols,\37\ which would be 
priced as Penny Symbols with this proposal, the Exchange believes that 
its proposal is reasonable, equitable and not unfairly discriminatory 
for the reasons which follow.
---------------------------------------------------------------------------

    \37\ Among the Select Symbols noted within Options 7, Section 2, 
the following are Penny Symbols: ASHR, DIA, EEM, EFA, EWJ, EWW, EWY, 
EWZ, FAS, FXI, GDX, GLD, HYG, IWM, IYR, KRE, OIH, QQQ, RSX, SDS, 
SLV, SSO, TBT, TLT, TNA, UNG, USO, UUP, UVXY, VXX, XLB, XLE, XLF, 
XLI, XLK, XLP, XLU, XLV, XLY, XME, XOP, and XRT.
---------------------------------------------------------------------------

Customers
    While this proposal would offer Customers lower Rebates to Add 
Liquidity in Select Symbols when trading against Non-Customers, BX 
Options Market Makers, Customer, or Firms which range from $0.00 to 
$0.20 per contract,\38\ instead of ranging from $0.00 to $0.25 per 
contract \39\ (no Tier 4

[[Page 82548]]

rebate of $0.25 per contract as was the case for Select Symbols with 
this proposal), as well as lower Rebates to Remove Liquidity in Select 
Symbols when trading against Non-Customers, BX Options Market Makers, 
or Firms which range from $0.00 to $0.35 per contract,\40\ instead of 
$0.00 to $0.37 per contract,\41\ (no Tier 3 and 4 rebate of $0.37 per 
contracts as it was for Select Symbols with this proposal), the 
Exchange believes that these rebates will continue to incentivize 
Participants to bring Customer liquidity to BX. While the Customer Fee 
to Add Liquidity in Select Symbols when contra to another Customer 
would increase from $0.33 to $0.39 per contract, regardless of the tier 
for Select Symbols,\42\ the Exchange believes that the fee remains 
competitive and will continue to attract order flow to BX to the 
benefit of all market participants. With this proposal, Customers would 
continue to pay no Penny Symbol Fee To Remove Liquidity.\43\
---------------------------------------------------------------------------

    \38\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive no Penny Symbol Rebate to Add Liquidity in Tier 1. 
Participants that execute 0.05% to less than 0.15% of total industry 
customer equity and ETF option ADV contracts per month would receive 
a $0.10 per contract Penny Symbol Rebate to Add Liquidity in Tier 2. 
Participants that execute 0.15% or more of total industry customer 
equity and ETF option ADV contracts per month would receive a $0.20 
per contract Penny Symbol Rebate to Add Liquidity in Tier 3.
    \39\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
receive no Select Symbol Rebate to Add Liquidity for Tier 1. 
Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
receive a $0.10 per contract Select Symbol Rebate to Add Liquidity 
for Tier 2. Participants that execute 0.15% or more of total 
industry customer equity and ETF option ADV contracts per month 
receive a $0.20 per contract Select Symbol Rebate to Add Liquidity 
for Tier 3. Participants that execute greater than 10,000 PRISM 
Agency Contracts per month; or Participant executes BX Options 
Market Maker volume of 0.30% or more of total industry customer 
equity and ETF options ADV per month receive a $0.25 per contract 
Select Symbol Rebate to Add Liquidity for Tier 4.
    \40\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive no Penny Symbol Rebate to Remove Liquidity in Tier 1. 
Participants that execute 0.05% to less than 0.15% of total industry 
customer equity and ETF option ADV contracts per month would receive 
a $0.25 per contract Penny Symbol Rebate to Remove Liquidity in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month will would 
receive a $0.35 per contract Penny Symbol Rebate to Remove Liquidity 
in Tier 3.
    \41\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
receive no Select Symbol Rebate to Remove Liquidity for Tier 1. 
Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
receive a $0.25 per contract Select Symbol Rebate to Remove 
Liquidity for Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month receive a $0.37 per contract Select Symbol Rebate to Remove 
Liquidity for Tier 3. Participants that execute greater than 10,000 
PRISM Agency Contracts per month; or Participant executes BX Options 
Market Maker volume of 0.30% or more of total industry customer 
equity and ETF options ADV per month receive a $0.37 per contract 
Select Symbol Rebate to Remove Liquidity for Tier 4.
    \42\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a $0.39 per contract Penny Symbol Fee to Add Liquidity in 
Tier 1. Participants that execute 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a $0.39 per contract Penny Symbol Fee to Add Liquidity in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month would pay a 
$0.39 per contract Penny Symbol Fee to Add Liquidity in Tier 3.
    \43\ Today, Customers pay no Select Symbol Fee To Remove 
Liquidity.
---------------------------------------------------------------------------

    All pricing would be uniformly assessed to Participants for Penny 
Symbols. Customers would continue to receive favorable pricing as 
compared to other market participants because Customer liquidity 
enhances liquidity on the Exchange for the benefit of all market 
participants. Specifically, Customer liquidity benefits all market 
participants by providing more trading opportunities which attracts 
market makers. An increase in the activity of these market participants 
(particularly in response to pricing) in turn facilitates tighter 
spreads which may cause an additional corresponding increase in order 
flow from other market participants.
BX Options Market Makers
    With this proposal, BX Options Market Makers would receive a Penny 
Symbol Rebate to Add Liquidity of $0.10 per contract only when the BX 
Options Market Maker is contra to a Non-Customer, Firm, or BX Options 
Market Maker. Today, BX Options Market Makers receive no Select Symbol 
Rebate to Add Liquidity. This rebate will incentivize Participants to 
send order flow to BX. With this proposal, BX Options Market Makers 
would continue to receive no Rebate to Remove Liquidity.\44\ With this 
proposal, BX Options Market Makers would pay a $0.39 per contract Penny 
Symbol Fee to Add Liquidity only when the BX Options Market Maker is 
contra to a Customer as compared to the Select Symbol Fee to Add 
Liquidity for BX Options Market Makers which ranges from $0.44 to $0.29 
per contract,\45\ as such some Participants will pay a higher Penny 
Symbol Fee to Add Liquidity while some Participants will pay a lower 
Penny Symbol Fee to Add Liquidity. The Exchange believes that the fee 
remains competitive and will continue to attract order flow to BX to 
the benefit of all market participants. With this proposal, BX Options 
Market Makers would pay a Penny Symbol Fee to Remove Liquidity when 
trading against a Customer which ranges from $0.39 to $0.30 per 
contract.\46\ These fees are lower than the current Select Symbol Fees 
to Remove Liquidity when trading against a Customer which range from 
$0.42 to $0.25 per contract.\47\ The Exchange believes that these lower 
fees will attract a greater amount of liquidity to BX. With this 
proposal, BX Options Market Makers would pay a Penny Symbol Fee to 
Remove Liquidity when trading against a Non-Customer, BX Options Market 
Maker or Firm of $0.46 per contract, regardless of the tier.\48\ This 
proposed Penny Symbol Fee to Remove Liquidity is the same as the 
current Fee to Remove Liquidity in Select Symbols when trading against 
a Firm, Non-Customer, or BX Options Market Maker of $0.46 per contract. 
With this proposal BX Options Market Makers pay no Penny Symbol Fee to 
Add Liquidity when contra to a Non-Customer, BX Options Market Maker or 
Firm. Today, BX Options Market Makers

[[Page 82549]]

pay a Fee to Add Liquidity in Select Symbols when trading against a 
Non-Customer, BX Options Market Maker or Firm which ranges from $0.14 
to $0.00 per contract \49\ which would be reduced to no fee and attract 
further liquidity to BX.
---------------------------------------------------------------------------

    \44\ Today, BX Options Market Makers receive no Select Symbol 
Rebate to Remove Liquidity.
    \45\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.44 per contract in Tier 
1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.44 per contract in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Add Liquidity of $0.40 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay a Select Symbol Fee to Add Liquidity of $0.29 per 
contract in Tier 4.
    \46\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Penny Symbol Fee to Remove Liquidity of $0.39 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Penny Symbol Fee to Remove Liquidity of $0.39 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Penny Symbol Fee to Remove Liquidity of $0.30 per 
contract in Tier 3.
    \47\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Remove Liquidity of $0.42 per contract in 
Tier 1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Remove Liquidity of $0.42 per contract in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Remove Liquidity of $0.39 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay a Select Symbol Fee to Remove Liquidity of $0.25 per 
contract in Tier 4.
    \48\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Penny Symbol Fee to Remove Liquidity of $0.46 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per 
contract in Tier 3.
    \49\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.14 per contract in Tier 
1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.10 per contract in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Add Liquidity of $0.04 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay no Select Symbol Fee to Add Liquidity in Tier 4.
---------------------------------------------------------------------------

    All pricing would be uniformly assessed to Participants for Penny 
Symbols. BX Options Market Makers add value through continuous quoting 
\50\ and are subject to additional requirements and obligations \51\ 
that other market participants are not. Incentivizing Market Makers to 
provide greater liquidity benefits all market participants through the 
quality of order interaction.
---------------------------------------------------------------------------

    \50\ See Options 2, Section 5.
    \51\ See Options 2, Section 4.
---------------------------------------------------------------------------

Non-Customers
    With this proposal, Non-Customers would receive no Penny Symbol 
Rebate to Add Liquidity and no Penny Symbol Rebate to Remove Liquidity, 
as is the case today under Select Symbol pricing. With this proposal, 
Non-Customers would pay a Penny Symbol Fee to Add Liquidity of $0.45 
per contract, this fee is lower than the current Select Symbol Fee to 
Add Liquidity of $0.46 per contract, regardless of counterparty, and 
will attract liquidity to BX. With this proposal, Non-Customers would 
pay a Penny Symbol Fee to Remove Liquidity of $0.46 per contract that 
is the same as the current Select Symbol Fee to Remove Liquidity in 
Select Symbols of $0.46 per contract, regardless of counterparty. All 
pricing would be uniformly assessed to Participants for Penny Symbols.
Firms
    With this proposal, Firms would receive no Penny Symbol Rebate to 
Add Liquidity and no Penny Symbol Rebate to Remove Liquidity, as is the 
case today under Select Symbol pricing. With this proposal, Firms would 
pay a Penny Symbol Fee to Add Liquidity of $0.45 per contract which is 
higher than the current Select Symbol Firm Fee to Add Liquidity of 
$0.37 per contract, regardless of counterparty. With this proposal, 
Firms would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per 
contract which is higher than the current Select Symbol Firm Fee to 
Remove Liquidity of $0.37 per contract, regardless of counterparty. 
Despite the fact that the Penny Symbol Fees to Add and Remove Liquidity 
will be higher, the Exchange believes that the fees remain competitive 
and will continue to attract order flow to BX to the benefit of all 
market participants. All pricing would be uniformly assessed to 
Participants for Penny Symbols.
Select Symbols To Be Priced as Non-Penny Symbols
    With respect to pricing for Select Symbols that would be priced as 
Non-Penny Symbols (DXJ, EWT, FAZ, FXE, FXP, QID, QLD, SKF, SRS, SSO, 
TZA, URE, UYG, and XHB) with this proposal, the Exchange believes that 
its proposal is reasonable, equitable and not unfairly discriminatory 
for the reasons which follow. The Exchange notes that, today, Select 
Symbol pricing is aligned closer to Penny Symbol pricing because the 
Select Symbols noted above which are proposed to be priced as Non-Penny 
Symbols were once in the Penny Pilot Program and these symbols are 
currently not in the Penny Interval Program.
Customers
    While this proposal would offer Customers lower Non-Penny Symbol 
Rebates to Add Liquidity when trading against a Non-Customer, BX 
Options Market Maker or Firm which would range from $0.00 to $0.25 per 
contract,\52\ instead of ranging from $0.00 to $0.20 per contract \53\ 
(no Tier 4 rebate of $0.25 per contract as was the case for Select 
Symbols with this proposal), the Exchange believes that these rebates 
will continue to incentivize Participants to bring Customer liquidity 
to BX. With this proposal, Customers would receive an increased Non-
Penny Symbol Rebate to Remove Liquidity when trading against a Non-
Customer, BX Options Market Maker, Customer or Firm of $0.80 per 
contract, regardless of the tier,\54\ as compared to the current Rebate 
to Remove Liquidity in Select Symbols when trading against Non-
Customers, BX Options Market Makers, Customers or Firms which range 
from $0.00 to $0.37 per contract.\55\ The Exchange believes that these 
rebates will continue to incentivize Participants to bring Customer 
liquidity to BX. With this proposal, Customers would pay an increased 
Non-Penny Symbol Fee to Add Liquidity when trading against a Customer 
of $0.85 per contract, regardless of the tier,\56\ as compared to the 
current Customer Fee to Add Liquidity in Select Symbols when

[[Page 82550]]

contra to another Customer of $0.33 per contract. Despite the fact that 
the Non-Penny Symbol Fee to Add and Remove Liquidity will be higher, 
the Exchange believes that the fees remain competitive and will 
continue to attract order flow to BX to the benefit of all market 
participants. With this proposal, Customers would continue not pay a 
Non-Penny Symbol Fee to Remove Liquidity.
---------------------------------------------------------------------------

    \52\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
receive no Select Symbol Rebate to Add Liquidity for Tier 1. 
Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
receive a $0.10 per contract Select Symbol Rebate to Add Liquidity 
for Tier 2. Participants that execute 0.15% or more of total 
industry customer equity and ETF option ADV contracts per month 
receive a $0.20 per contract Select Symbol Rebate to Add Liquidity 
for Tier 3. Participants that execute greater than 10,000 PRISM 
Agency Contracts per month; or Participant executes BX Options 
Market Maker volume of 0.30% or more of total industry customer 
equity and ETF options ADV per month receive a $0.25 per contract 
Select Symbol Rebate to Add Liquidity for Tier 4.
    \53\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive no Non-Penny Symbol Rebate to Add Liquidity in Tier 1. 
Participants that execute 0.05% to less than 0.15% of total industry 
customer equity and ETF option ADV contracts per month would receive 
a $0.10 per contract Non-Penny Symbol Rebate to Add Liquidity in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month will would 
receive a $0.20 per contract Non-Penny Symbol Rebate to Add 
Liquidity in Tier 3.
    \54\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive a Non-Penny Symbol Rebate to Remove Liquidity of $0.80 
per contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would receive a Non-Penny Symbol Rebate to Remove 
Liquidity of $0.80 per contract in Tier 2. Participants that execute 
0.15% or more of total industry customer equity and ETF option ADV 
contracts per month would receive a Non-Penny Symbol Rebate to 
Remove Liquidity of $0.80 per contract in Tier 3.
    \55\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
receive no Select Symbol Rebate to Remove Liquidity for Tier 1. 
Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
receive a $0.25 per contract Select Symbol Rebate to Remove 
Liquidity for Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month receive a $0.37 per contract Select Symbol Rebate to Remove 
Liquidity for Tier 3. Participants that execute greater than 10,000 
PRISM Agency Contracts per month; or Participant executes BX Options 
Market Maker volume of 0.30% or more of total industry customer 
equity and ETF options ADV per month receive a $0.37 per contract 
Select Symbol Rebate to Remove Liquidity for Tier 4.
    \56\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Non-Penny Symbol Fee to Add Liquidity of $0.85 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Add Liquidity of $0.85 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Non-Penny Symbol Fee to Add Liquidity of $0.85 per 
contract in Tier 3.
---------------------------------------------------------------------------

    All pricing would be uniformly assessed to Participants for Non-
Penny Symbols. Customers would continue to receive favorable pricing as 
compared to other market participants because Customer liquidity 
enhances liquidity on the Exchange for the benefit of all market 
participants. Specifically, Customer liquidity benefits all market 
participants by providing more trading opportunities which attracts 
market makers. An increase in the activity of these market participants 
(particularly in response to pricing) in turn facilitates tighter 
spreads which may cause an additional corresponding increase in order 
flow from other market participants.
BX Options Market Makers
    With this proposal, BX Options Market Makers would receive no Non-
Penny Symbol Rebate to Add Liquidity or Non-Penny Rebate to Remove 
Liquidity, as is the case today under Select Symbols as well. With this 
proposal, BX Options Market Makers would pay a $0.50 per contract Non-
Penny Symbol Fee to Add Liquidity when trading against a BX Options 
Market Maker, Non-Customer or Firm and a $0.95 per contract Non-Penny 
Symbol Fee to Add Liquidity when trading against a Customer. Currently, 
BX Options Market Makers pay a Fee to Add Liquidity in Select Symbols 
when trading against a Non-Customer, BX Options Market Maker or Firm 
which ranges from $0.14 to $0.00 per contract \57\ and BX Options 
Market Makers pay a Fee to Add Liquidity in Select Symbols when trading 
against a Customer which ranges from $0.44 to $0.29 per contract.\58\ 
Despite the fact that the Non-Penny Symbol Fees to Add Liquidity will 
be higher, the Exchange believes that the fees remain competitive and 
will continue to attract order flow to BX to the benefit of all market 
participants. With this proposal, BX Options Market Makers would pay a 
Non-Penny Symbol Fee to Remove Liquidity when trading against a 
Customer which ranges from $0.89 to $0.60 per contract.\59\ This fee 
would be higher than the current BX Options Market Makers pay a Fee to 
Remove Liquidity in Select Symbols when trading against a Customer 
which ranges from $0.42 to $0.25 per contract.\60\ Also, with this 
proposal, BX Options Market Makers would pay a Non-Penny Symbol Fee to 
Remove Liquidity when trading against a Non-Customer, BX Options Market 
Maker, or Firm of $0.89 per contract, regardless of the tier.\61\ This 
fee would be higher than the current BX Options Market Makers pay a Fee 
to Remove Liquidity in Select Symbols when trading against a Firm, Non-
Customer, or BX Options Market Maker of $0.46 per contract. Despite the 
fact that the Non-Penny Symbol Fees to Remove Liquidity will be higher, 
the Exchange believes that the fees remain competitive and will 
continue to attract order flow to BX to the benefit of all market 
participants.
---------------------------------------------------------------------------

    \57\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.14 per contract in Tier 
1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.10 per contract in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Add Liquidity of $0.04 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay no Select Symbol Fee to Add Liquidity in Tier 4.
    \58\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.44 per contract in Tier 
1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Add Liquidity of $0.44 per contract in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Add Liquidity of $0.40 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay a Select Symbol Fee to Add Liquidity of $0.29 per 
contract in Tier 4.
    \59\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Non-Penny Symbol Fee to Remove Liquidity of $0.89 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Remove Liquidity of 
$0.89 per contract in Tier 2. Participants that execute 0.15% or 
more of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Remove Liquidity of 
$0.60 per contract in Tier 3.
    \60\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Remove Liquidity of $0.42 per contract in 
Tier 1. Participants that executes 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month pay 
a Select Symbol Fee to Remove Liquidity of $0.42 per contract in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month pay a Select 
Symbol Fee to Remove Liquidity of $0.39 per contract in Tier 3. 
Participants that execute greater than 10,000 PRISM Agency Contracts 
per month; or Participant executes BX Options Market Maker volume of 
0.30% or more of total industry customer equity and ETF options ADV 
per month pay a Select Symbol Fee to Remove Liquidity of $0.25 per 
contract in Tier 4.
    \61\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Non-Penny Symbol Fee to Remove Liquidity of $0.89 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Remove Liquidity of 
$0.89 per contract in Tier 2. Participants that execute 0.15% or 
more of total industry customer equity and ETF option ADV contracts 
per month would pay a Non-Penny Symbol Fee to Remove Liquidity of 
$0.89 per contract in Tier 3.
---------------------------------------------------------------------------

    All pricing would be uniformly assessed to Participants for Non-
Penny Symbols. BX Options Market Makers add value through continuous 
quoting \62\ and are subject to additional requirements and obligations 
\63\ that other market participants are not. Incentivizing Market 
Makers to provide greater liquidity benefits all market participants 
through the quality of order interaction.
---------------------------------------------------------------------------

    \62\ See Options 2, Section 5.
    \63\ See Options 2, Section 4.
---------------------------------------------------------------------------

Non-Customers
    With this proposal, Non-Customers would receive no Non-Penny Symbol 
Rebate to Add Liquidity or Non-Penny Symbol Rebate to Remove Liquidity 
as is the case today for Select Symbols. With this proposal, Non-
Customers would pay an increased Non-Penny Symbol Fee to Add Liquidity 
of $0.98 per contract as compared to the current Non-Customer Fee to 
Add Liquidity in Select Symbols of $0.46 per contract, regardless of 
counterparty. Also, with this proposal, Non-Customers would pay an 
increased Non-Penny Symbol Fee to Remove Liquidity of $0.89 per 
contract as compared to the current Non-Customer Fee to Remove 
Liquidity in Select Symbols of $0.46 per contract, regardless of 
counterparty. Despite the fact that the Non-Penny Symbol Fees to Add 
and Remove Liquidity will be higher, the Exchange believes that the 
fees remain competitive and will continue to attract order flow to BX 
to the benefit of all market participants. All pricing would be 
uniformly assessed to Participants for Non-Penny Symbols.
Firms
    With this proposal, Firms would receive no Non-Penny Symbol Rebate 
to Add Liquidity or Non-Penny Symbol Rebate to Remove Liquidity as is 
the

[[Page 82551]]

case for Select Symbols. With this proposal, Firms would pay an 
increased Non-Penny Symbol Fee to Add Liquidity of $0.98 per contract 
as compared to the current Firm Fee to Add Liquidity in Select Symbols 
of $0.37 per contract, regardless of counterparty. With this proposal, 
Firms would pay an increased Non-Penny Symbol Fee to Remove Liquidity 
of $0.89 per contract as compared to the current Firm Fee to Remove 
Liquidity in Select Symbols of $0.37 per contract, regardless of 
counterparty. Despite the fact that the Non-Penny Symbol Fees to Add 
and Remove Liquidity will be higher, the Exchange believes that the 
fees remain competitive and will continue to attract order flow to BX 
to the benefit of all market participants. All pricing would be 
uniformly assessed to Participants for Non-Penny Symbols.
SPY
    With respect to the impact on pricing for SPY that would be priced 
as a Penny Symbol with this proposal, the Exchange believes that its 
proposal is reasonable, equitable and not unfairly discriminatory for 
the reasons which follow.
Customers
    With this proposal Customers would receive higher Penny Symbol 
Rebates to Add Liquidity when trading against a Non-Customer, BX 
Options Market Maker or Firm which range from $0.00 to $0.20 per 
contract.\64\ Today, Customers receive no rebate when add liquidity in 
SPY when trading against a Non-Customer, BX Options Market Maker or 
Firm. The Exchange believes that these increased rebates will 
incentivize Participants to bring Customer liquidity to BX. With this 
proposal, Customers would receive a lower Penny Symbol Rebate to Remove 
Liquidity when trading against a Non-Customer, BX Options Market Maker, 
Customer or Firm which ranges from $0.00 to $0.35 per contract.\65\ 
Today, Customers receive a SPY Rebate to Remove Liquidity when trading 
against a Non-Customer, BX Options Market Maker, Customer or Firm which 
ranges from $0.01 to $0.52 per contracts when trading against a Non-
Customer, BX Options Market Maker, Customer or Firm.\66\ Despite the 
fact that the Penny Symbol Rebates to Remove Liquidity in will be 
lower, the Exchange believes that the fees remain competitive and will 
continue to attract order flow to BX to the benefit of all market 
participants. With this proposal, Customers would pay an increased 
Penny Symbol Fee to Add Liquidity when trading against a Customer of 
$0.39 per contract, regardless of the tier,\67\ as compared to the 
current Customer SPY Fees to Add Liquidity of $0.38 per contract when 
contra to another Customer. Despite the fact that the Penny Symbol Fees 
to Add Liquidity when contra to another Customer will be higher than 
the SPY Fee to Add Liquidity when contra to a Customer, the Exchange 
believes that the fees remain competitive and will continue to attract 
order flow to BX to the benefit of all market participants. With this 
proposal, t will be no Fee to Add Liquidity when contra to Firm, BX 
Options Market Maker or Non Customer, as is the case today. With this 
proposal, Customers would not pay a Penny Symbol Fee to Remove 
Liquidity as is the case for SPY today.
---------------------------------------------------------------------------

    \64\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive no Penny Symbol Rebate to Add Liquidity in Tier 1. 
Participants that execute 0.05% to less than 0.15% of total industry 
customer equity and ETF option ADV contracts per month would receive 
a $0.10 per contract Penny Symbol Rebate to Add Liquidity in Tier 2. 
Participants that execute 0.15% or more of total industry customer 
equity and ETF option ADV contracts per month would receive a $0.20 
per contract Penny Symbol Rebate to Add Liquidity in Tier 3.
    \65\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would receive no Penny Symbol Rebate to Remove Liquidity in Tier 1. 
Participants that execute 0.05% to less than 0.15% of total industry 
customer equity and ETF option ADV contracts per month would receive 
a $0.25 per contract Penny Symbol Rebate to Remove Liquidity in Tier 
2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month will would 
receive a $0.35 per contract Penny Symbol Rebate to Remove Liquidity 
in Tier 3.
    \66\ Tier 1 Participants that remove less than 500 SPY Options 
contracts per day in the customer range receive a $0.01 per contract 
rebate. Tier 2 Participants that remove 500 to not more than 999 SPY 
Options contracts per day in the customer range receive a $0.10 per 
contract rebate. Tier 3 Participants that removes 1000 to not more 
than 1999 SPY Options contracts per day in the customer range 
receive a $0.35 per contract rebate. Tier 4 Participants that remove 
2000 to not more than 3999 SPY Options contracts per day in the 
customer range receive a $0.43 per contract rebate. Tier 5 
Participants that remove more than 3999 SPY Options contracts per 
day in the customer range receive a $0.52 per contract rebate.
    \67\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a $0.39 per contract Penny Symbol Fee to Add Liquidity in 
Tier 1. Participants that execute 0.05% to less than 0.15% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a $0.39 per contract Penny Symbol Fee to Add Liquidity in 
Tier 2. Participants that execute 0.15% or more of total industry 
customer equity and ETF option ADV contracts per month would pay a 
$0.39 per contract Penny Symbol Fee to Add Liquidity in Tier 3.
---------------------------------------------------------------------------

    All pricing would be uniformly assessed to Participants for Penny 
Symbols. Customers would continue to receive favorable pricing as 
compared to other market participants because Customer liquidity 
enhances liquidity on the Exchange for the benefit of all market 
participants. Specifically, Customer liquidity benefits all market 
participants by providing more trading opportunities which attracts 
market makers. An increase in the activity of these market participants 
(particularly in response to pricing) in turn facilitates tighter 
spreads that may cause an additional corresponding increase in order 
flow from other market participants.
BX Options Market Makers
    With this proposal, BX Options Market Makers would receive a new 
Penny Symbol Rebate to Add Liquidity of $0.10 per contract only when 
the BX Options Market Maker is contra to a Non-Customer, Firm, or BX 
Options Market Maker, while currently BX Options Market Makers receive 
no rebates in SPY. This new rebate will incentivize Participants to 
bring liquidity to BX. With this proposal, BX Options Market Makers 
would receive no Penny Symbol Rebate to Remove Liquidity, as is the 
case today for SPY. With this proposal, BX Options Market Makers would 
pay a $0.39 per contract Penny Symbol Fee to Add Liquidity only when 
the BX Options Market Maker is contra to a Customer which is the same 
as the current BX Options Market Makers SPY Fee to Add Liquidity of 
$0.39 per contract when trading against a Customer. With this proposal, 
the Exchange would not assess a Penny Symbol Fee to Add Liquidity when 
trading against a Firm, BX Options Market Maker or Non Customer as 
compared to today, where a BX Options Market Maker pays a SPY Fee to 
Add Liquidity of $0.14 per contract when trading against a Firm, BX 
Options Market Maker or Non Customer. The removal of this fee should 
incentivize BX Participants to send order flow to BX.
    With this proposal, BX Options Market Makers would pay a Penny 
Symbol Fee to Remove Liquidity when trading against a Customer which 
ranges from $0.39 to $0.30 per contract,\68\ as compared to the current 
BX Options

[[Page 82552]]

Market Maker Fee to Remove Liquidity in SPY Options of $0.39 per 
contract when trading with Customer. With this proposal, the fee will 
be lower in certain cases depending on the volume tier achieved and may 
attract higher volume to the Exchange in an effort to obtain the lower 
fee. With this proposal, BX Options Market Makers would pay an 
increased Penny Symbol Fee to Remove Liquidity when trading against a 
Non-Customer, BX Options Market Maker or Firm of $0.46 per contract, 
regardless of the tier,\69\ as compared to the current BX Options 
Market Makers pay a SPY Fee to Remove Liquidity of $0.44 per contract 
when trading against a Firm, Non-Customer, or BX Options Market Maker. 
Despite the fact that the Penny Symbol Fee to Remove Liquidity will be 
higher, the Exchange believes that the fees remain competitive and will 
continue to attract order flow to BX to the benefit of all market 
participants.
---------------------------------------------------------------------------

    \68\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Penny Symbol Fee to Remove Liquidity of $0.39 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Penny Symbol Fee to Remove Liquidity of $0.39 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Penny Symbol Fee to Remove Liquidity of $0.30 per 
contract in Tier 3.
    \69\ Participants that executes less than 0.05% of total 
industry customer equity and ETF option ADV contracts per month 
would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per 
contract in Tier 1. Participants that execute 0.05% to less than 
0.15% of total industry customer equity and ETF option ADV contracts 
per month would pay a Penny Symbol Fee to Remove Liquidity of $0.46 
per contract in Tier 2. Participants that execute 0.15% or more of 
total industry customer equity and ETF option ADV contracts per 
month would pay a Penny Symbol Fee to Remove Liquidity of $0.46 per 
contract in Tier 3.
---------------------------------------------------------------------------

    All pricing would be uniformly assessed to Participants for Penny 
Symbols. BX Options Market Makers add value through continuous quoting 
\70\ and are subject to additional requirements and obligations \71\ 
that other market participants are not. Incentivizing Market Makers to 
provide greater liquidity benefits all market participants through the 
quality of order interaction.
---------------------------------------------------------------------------

    \70\ See Options 2, Section 5.
    \71\ See Options 2, Section 4.
---------------------------------------------------------------------------

Non-Customers
    With this proposal, Non-Customers would receive no Penny Symbol 
Rebate to Add Liquidity and no Penny Symbol Rebate to Remove Liquidity, 
as is the case today for SPY. With this proposal, Non-Customers would 
pay an increased Penny Symbol Fee to Add Liquidity of $0.45 per 
contract as compared to the current Non-Customers SPY Fee to Add 
Liquidity of $0.44 per contract, regardless of counterparty. With this 
proposal, Non-Customers would pay an increased Penny Symbol Fee to 
Remove Liquidity of $0.46 per contract as compared to the current Non-
Customers SPY Fee to Remove Liquidity of $0.44 per contract, regardless 
of counterparty. Despite the fact that the Penny Symbol Fees to Add and 
Remove Liquidity will be higher, the Exchange believes that the fees 
remain competitive and will continue to attract order flow to BX to the 
benefit of all market participants. All pricing would be uniformly 
assessed to Participants for Penny Symbols.
Firms
    With this proposal, Firms would receive no Penny Symbol Rebate to 
Add Liquidity and no Penny Symbol Rebate to Remove Liquidity, as is the 
case today with SPY. With this proposal, Firms would pay an increased 
Penny Symbol Fee to Add Liquidity of $0.45 per contract as compared to 
the current Firm SPY Fee to Add Liquidity of $0.41 per contract, 
regardless of counterparty. With this proposal, Firms would pay an 
increased Penny Symbol Fee to Remove Liquidity of $0.46 per contract as 
compared to the current Firm SPY Fee to Remove Liquidity of $0.41 per 
contract, regardless of counterparty. Despite the fact that the Penny 
Symbol Fees to Add and Remove Liquidity will be higher, the Exchange 
believes that the fees remain competitive and will continue to attract 
order flow to BX to the benefit of all market participants. All pricing 
would be uniformly assessed to Participants for Penny Symbols.
Technical Amendments
    The Exchange's proposal to make technical amendments to footnote 4 
and renumber current footnote within Options 7, Section 2, and remove 
``(excluding Select Symbols Options)'' from Options 7, Section 2(1) are 
reasonable, equitable and not unfairly discriminatory.
Options 7, Section 3
    The Exchange's proposal to amend Options 7, Section 3, ``BX Options 
Market--Ports and other Services,'' is reasonable, equitable and not 
unfairly discriminatory as the rule text is obsolete in that the text 
reflects timeframes which have passed.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.
Inter-Market Competition
    The proposal does not impose an undue burden on inter-market 
competition. The Exchange believes its proposal remains competitive 
with other options markets and will offer market participants with 
another choice of where to transact options. The Exchange notes that it 
operates in a highly competitive market in which market participants 
can readily favor competing venues if they deem fee levels at a 
particular venue to be excessive, or rebate opportunities available at 
other venues to be more favorable. In such an environment, the Exchange 
must continually adjust its fees to remain competitive with other 
exchanges that have been exempted from compliance with the statutory 
standards applicable to exchanges. Because competitors are free to 
modify their own fees in response, and because market participants may 
readily adjust their order routing practices, the Exchange believes 
that the degree to which fee changes in this market may impose any 
burden on competition is extremely limited.
Intra-market Competition
    The proposed amendments do not impose an undue burden on intra-
market competition.
Options 7, Section 2
Select Symbols To Be Priced as Penny Symbols
    With respect to pricing certain Select Symbols,\72\ which would be 
priced as Penny Symbols with this proposal, the Exchange believes that 
its proposal does not impose an undue burden on competition.
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    \72\ Among the Select Symbols noted within Options 7, Section 2, 
the following are Penny Symbols: ASHR, DIA, EEM, EFA, EWJ, EWW, EWY, 
EWZ, FAS, FXI, GDX, GLD, HYG, IWM, IYR, KRE, OIH, QQQ, RSX, SDS, 
SLV, SSO, TBT, TLT, TNA, UNG, USO, UUP, UVXY, VXX, XLB, XLE, XLF, 
XLI, XLK, XLP, XLU, XLV, XLY, XME, XOP, and XRT.
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    All pricing would be uniformly assessed to Participants for Penny 
Symbols. Customers would continue to receive favorable pricing as 
compared to other market participants because Customer liquidity 
enhances liquidity on the Exchange for the benefit of all market 
participants. Specifically, Customer liquidity benefits all market 
participants by providing more trading opportunities which attracts 
market makers. An increase in the activity of these market participants 
(particularly in response to pricing) in turn facilitates tighter 
spreads which may cause an additional corresponding increase in order 
flow from other market participants. BX Options Market Makers add value 
through continuous quoting \73\ and are subject to additional 
requirements and obligations \74\ that other market participants are 
not. Incentivizing Market Makers to provide greater liquidity benefits 
all market

[[Page 82553]]

participants through the quality of order interaction.
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    \73\ See Options 2, Section 5.
    \74\ See Options 2, Section 4.
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    Select Symbols to be Priced as Non-Penny Symbols
    With respect to pricing for Select Symbols which would be priced as 
Non-Penny Symbols (DXJ, EWT, FAZ, FXE, FXP, QID, QLD, SKF, SRS, SSO, 
TZA, URE, UYG, and XHB) with this proposal, the Exchange believes that 
its proposal does not impose an undue burden on competition.
    All pricing would be uniformly assessed to Participants for Non-
Penny Symbols. Customers would continue to receive favorable pricing as 
compared to other market participants because Customer liquidity 
enhances liquidity on the Exchange for the benefit of all market 
participants. Specifically, Customer liquidity benefits all market 
participants by providing more trading opportunities which attracts 
market makers. An increase in the activity of these market participants 
(particularly in response to pricing) in turn facilitates tighter 
spreads which may cause an additional corresponding increase in order 
flow from other market participants. All pricing would be uniformly 
assessed to Participants for Non-Penny Symbols. BX Options Market 
Makers add value through continuous quoting \75\ and are subject to 
additional requirements and obligations \76\ that other market 
participants are not. Incentivizing Market Makers to provide greater 
liquidity benefits all market participants through the quality of order 
interaction.
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    \75\ See Options 2, Section 5.
    \76\ See Options 2, Section 4.
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SPY
    With respect to the impact on pricing for SPY which would be priced 
as a Penny Symbol with this proposal, the Exchange believes that its 
proposal does not impose an undue burden on competition.
    All pricing would be uniformly assessed to Participants for Penny 
Symbols. Customers would continue to receive favorable pricing as 
compared to other market participants because Customer liquidity 
enhances liquidity on the Exchange for the benefit of all market 
participants. Specifically, Customer liquidity benefits all market 
participants by providing more trading opportunities which attracts 
market makers. An increase in the activity of these market participants 
(particularly in response to pricing) in turn facilitates tighter 
spreads which may cause an additional corresponding increase in order 
flow from other market participants. BX Options Market Makers add value 
through continuous quoting \77\ and are subject to additional 
requirements and obligations \78\ that other market participants are 
not. Incentivizing Market Makers to provide greater liquidity benefits 
all market participants through the quality of order interaction.
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    \77\ See Options 2, Section 5.
    \78\ See Options 2, Section 4.
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Technical Amendments
    The Exchange's proposal to make technical amendments to footnote 4 
and renumber current footnote within Options 7, Section 2, and remove 
``(excluding Select Symbols Options)'' from Options 7, Section 2(1) do 
not impose an undue burden on competition.
Options 7, Section 3
    The Exchange's proposal to amend Options 7, Section 3, ``BX Options 
Market--Ports and other Services,'' does not impose an undue burden on 
competition as the rule text is obsolete in that the text reflects 
timeframes which have passed.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

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.\79\
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    \79\ 15 U.S.C. 78s(b)(3)(A)(ii).
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    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) 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 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-BX-2020-037 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-BX-2020-037. 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-BX-2020-037 and should be submitted on 
or before January 8, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\80\
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    \80\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-27838 Filed 12-17-20; 8:45 am]
BILLING CODE 8011-01-P