Document ID: SEC-2023-0828-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe BZX Exchange, Inc.
Posted Date: 2023-08-03T04:00Z

[Federal Register Volume 88, Number 148 (Thursday, August 3, 2023)]
[Notices]
[Pages 51371-51373]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16500]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98015; File No. SR-CboeBZX-2023-055]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
the Fees Applicable to Securities Listed on the Exchange, Which Are Set 
Forth in BZX Rule 14.13, Company Listing Fees

July 28, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that, on July 27, 2023, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been prepared by the self-regulatory 
organization. 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

    Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing 
with the Securities and Exchange Commission (``Commission'' or ``SEC'') 
a proposed rule change to amend the fees applicable to securities 
listed on the Exchange, which are set forth in BZX Rule 14.13, Company 
Listing Fees. The text of the proposed rule change is provided in 
Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 
statements.

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

1. Purpose
    On August 30, 2011, the Exchange received approval of rules 
applicable to the qualification, listing and delisting of companies on 
the Exchange,\3\ which it modified on February 8, 2012 in order to 
adopt pricing for the listing of exchange-traded products (``ETPs'') 
\4\ on the Exchange.\5\ On January 1, 2019, the Exchange amended Rule 
14.13 in order to charge an entry fee for ETPs that are not 
``Generically-Listed ETPs''.6 7 Now, the Exchange proposes 
to amend its listing fees to provide that the entry fee provided in 
Rule 14.13(b)(1)(C)(i) will be charged for non-Generically Listed ETPs 
for each proposed rule change pursuant to Section 19(b) of the Exchange 
Act (``Exchange Rule Filing'').
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    \3\ See Securities Exchange Act Release No. 65225 (August 30, 
2011), 76 FR 55148 (September 6, 2011) (SR-BATS-2011-018).
    \4\ As defined in Rule 11.8(e)(1)(A), the term ``ETP'' means any 
security listed pursuant to Exchange Rule 14.11.
    \5\ See Securities Exchange Act Release No. 66422 (February 17, 
2012), 77 FR 11179 (February 24, 2012) (SR-BATS-2012-010).
    \6\ ``Generically-Listed ETPs'' refers to all ETPs, with the 
exception of Index Fund Shares, Portfolio Depositary Receipts, 
Managed Fund Shares, Linked Securities, Currency Trust Shares, and 
Exchange-Traded Fund Shares that are listed on the Exchange pursuant 
to Rule 19b-4(e) under the Exchange Act and for which a proposed 
rule change pursuant to Section 19(b) of the Exchange Act is not 
required to be filed with the Commission. See Exchange Rule 
14.13(b)(1)(C)(i).
    \7\ See Securities Exchange Act No. 83597 (July 5, 2018) 83 FR 
32164 (July 11, 2018) (SR-CboeBZX-2018-046) (the ``Original Entry 
Fee Filing'').
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    Currently, Exchange Rule 14.13(b)(1)(C) provides that a Company 
that submits an application to list any ETP shall be required to pay an 
entry fee to the Exchange as follows:
    (i) All ETPs, with the exception of Generically-Listed ETPs, shall 
pay an entry fee of $7,500. Each issuer will be subject to an aggregate 
maximum entry fee of $22,500 per calendar year.
    (ii) There is no entry fee for Generically-Listed ETPs or ETPs that 
transfer their listing from another national securities exchange to the 
Exchange (a ``Transfer Listing'').
    As such, a $7,500 fee applies to each ETP per application rather 
than per Exchange Rule Filing. The Exchange now proposes to amend and 
restructure Exchange Rule 14.13(b)(1)(C)(i) to provide that all ETPs 
that are not Generically-Listed will be charged the fee for each 
Exchange Rule Filing unless it is in furtherance of the same continuous 
effort. Rule 14.13(b)(1)(C)(i) would be modified to define the term 
``Exchange Rule Filing'' and clarify that the entry fee is applied on a 
per ETP basis. Accordingly, proposed Rule 14.13(b)(1)(C)(i) would state 
that all ETPs, with the exception of Index Fund Shares, Portfolio 
Depositary Receipts, Managed Fund Shares, Linked Securities, Currency 
Trust Shares, and Exchange-Traded Fund Shares that are listed on the 
Exchange pursuant to Rule 19b-4(e) under the Exchange Act and for which 
an Exchange Rule Filing is not required to be filed with the Commission 
(collectively, ``Generically-

[[Page 51372]]

Listed ETPs''), shall pay an entry fee of $7,500 per ETP.
    The Exchange notes that the amended entry fee would continue to be 
subject to the maximum entry fee of $22,500 per calendar year per 
issuer as currently provided in Rule 14.13(b)(1)(C)(i), however the 
Exchange proposes to move such provision to proposed Rule 
14.13(b)(1)(C)(i)(b). The Exchange also proposes to adopt new Rule 
14.13(b)(1)(C)(i)(a), which would state that the Exchange will charge 
for each Exchange Rule Filing per ETP unless it is in furtherance of 
the same continuous effort. An Exchange Rule Filing is considered in 
furtherance of the same continuous effort if: the Exchange Rule Filing 
is required for ministerial purposes related to another previously 
filed Exchange Rule Filing, or if the Exchange Rule Filing is withdrawn 
and refiled within 30 calendar days.
    As discussed in the Original Entry Fee Filing, ETPs that require an 
Exchange Rule Filing require significant additional time and extensive 
legal and business resources by Exchange staff to prepare and review 
such filings and to communicate with issuers and the Commission 
regarding such filings. The proposed fee would be used to address such 
costs for each Exchange Rule Filing. Therefore, the Exchange is only 
proposing to assess the entry fee for additional Exchange Rule Filings 
that are not filed in furtherance of the same continuous effort. For 
example, the Exchange would not assess an additional entry fee to an 
ETP in the event that an Exchange Rule Filing was submitted to the 
Commission and shortly thereafter withdrawn and resubmitted. Similarly, 
the Exchange would not assess an additional entry fee to an ETP in the 
event that an Exchange Rule Filing was submitted to the Commission, 
rejected by the Commission, and shortly thereafter resubmitted. 
Instances where Exchange Rule Filings are either rejected or withdrawn 
and refiled shortly thereafter often involve minor or ministerial 
errors that are in furtherance of the same continuous effort.
    Further, the Exchange would not charge an entry fee to an ETP with 
an Exchange Rule Filing that is withdrawn and shortly thereafter 
refiled in order to restart the regulatory review period. Specifically, 
if an Exchange Rule Filing is nearing the end of its regulatory review 
period but has not met the regulatory burden to be approved by the 
Commission, the Exchange may withdraw and resubmit the Exchange Rule 
Filing, which would restart the regulatory review period, rather than 
receive a disapproval. As the Exchange would withdraw and refile the 
Exchange Rule Filing within 30 calendar days, the Exchange would 
consider the subsequent filing to be submitted in furtherance of the 
same continuous effort.
    The Exchange would assess an entry fee to an ETP with an Exchange 
Rule Filing in all other circumstances. For example, the refiling of an 
Exchange Rule Filing that has previously been disapproved by the 
Commission requires updated analysis to address the Commission's basis 
for disapproval. The Exchange would not consider this new analysis in 
furtherance of the same continuous effort, and therefore would apply 
the entry fee to such Exchange Rule Filing. Another example would be 
the refiling of an Exchange Rule Filing that has been withdrawn, but 
not refiled within 30 calendar days. The Exchange would not consider 
such refiling in furtherance of the same continuous effort due to the 
time lapse and necessary updates required before refiling the Exchange 
Rule Filing.
2. Statutory Basis
    The Exchange believes that the proposed rule changes are consistent 
with the objectives of Section 6 of the Act,\8\ in general, and 
furthers the objectives of Section 6(b)(4) and 6(b)(5),\9\ in 
particular, as it is designed to provide for the equitable allocation 
of reasonable dues, fees and other charges among its issuers, and it 
does not unfairly discriminate between customers, issuers, brokers or 
dealers.
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    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that proposed Rule 14.13(b)(1)(C)(i), which 
provides that that all ETPs that are not Generically-Listed will be 
charged the entry fee for each Exchange Rule Filing, is a reasonable, 
fair and equitable, and not unfairly discriminatory allocation of fees 
and other charges because it would apply equally to all firms. The 
Exchange believes that charging such an entry fee for each Exchange 
Rule Filing unless it is in furtherance of the same continuous effort 
is reasonable given the additional resources required by the Exchange 
in preparing each Exchange Rule Filing for an ETP. Specifically, each 
Exchange Rule Filing requires significant additional time and extensive 
legal and business resources by Exchange staff to prepare and review 
such filings and to communicate with issuers and the Commission 
regarding such filings.
    The Exchange believes that an Exchange Rule Filing that is 
withdrawn and refiled within 30 calendar days can be assumed to be in 
furtherance of the same continuous effort. Specifically, if an Exchange 
Rule Filing is nearing the end of its regulatory review period but has 
not met the regulatory burden to be approved by the Commission, the 
Exchange may withdraw and resubmit the Exchange Rule Filing, which 
would restart the regulatory review period, rather than receive a 
disapproval. As the Exchange would withdraw and refile the Exchange 
Rule Filing within 30 calendar days, the Exchange would consider the 
subsequent filing to be submitted in furtherance of the same continuous 
effort because such a submission would generally not require the same 
significant additional time and extensive legal and business resources 
associated with other Exchange Rule Filings.
    Furthermore, the marketplace for listings is extremely competitive 
and there are several other national securities exchanges that offer 
ETP listings. Transfers between listing venues occur frequently for 
numerous reasons, including listing fees. The proposed rule change 
reflects a competitive pricing structure, which the Exchange believes 
will enhance competition both among ETP issuers and listing venues, to 
the benefit of investors.
    Based on the foregoing, the Exchange believes that the proposed 
rule changes are consistent with the Act.

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. The Exchange does not believe 
that the proposed fee will burden competition, but instead, enhance 
competition, as it is intended to address the costs associated with 
preparing each Exchange Rule Filing. As such, the proposal is a 
competitive proposal designed to enhance pricing competition among 
listing venues and implement pricing that better reflects expenses 
associated with listing ETPs on the Exchange. The Exchange does not 
believe the proposed amendment would burden intramarket competition as 
the proposed fee would be assessed to all issuers uniformly for each 
Exchange Rule Filing.

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

    The Exchange neither solicited nor received comments on the 
proposed rule change.

[[Page 51373]]

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,\10\ and Rule 19b-4(f)(2) \11\ thereunder. 
At any time within 60 days of the filing of the proposed rule change, 
the Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act. If the Commission takes such 
action, the Commission shall institute proceedings to determine whether 
the proposed rule should be approved or disapproved.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeBZX-2023-055 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-CboeBZX-2023-055. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2023-055 and should 
be submitted on or before August 24, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-16500 Filed 8-2-23; 8:45 am]
BILLING CODE 8011-01-P