Document ID: SEC-2020-1845-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe BZX Exchange, Inc.
Posted Date: 2020-11-18T05:00Z

[Federal Register Volume 85, Number 223 (Wednesday, November 18, 2020)]
[Notices]
[Pages 73540-73541]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25384]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90403; File No. SR-CboeBZX-2020-084]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change To Amend the 
Fee Schedule To Correct Drafting Error in a Footnote

November 12, 2020.
    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 November 9, 2020, 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, 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

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') is filing 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change to amend the fee schedule. 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
    The Exchange proposes to amend its fee schedule to correct an 
inadvertent drafting error. Specifically, the Exchange submitted a rule 
filing on September 11, 2020 to amend the Fee Schedule,\3\ which, among 
other things, amended the standard rates for orders that add liquidity 
in securities priced under $1.00 by providing for a standard rebate of 
$0.00009 per share (``September Filing''). As discussed in the 
September Filing, this change was intended to apply solely to orders 
yielding fee codes B, V and Y that add liquidity to the Exchange. 
Indeed, the filing specifically provided that this new standard rebate 
for orders in securities priced below $1.00 would be applied to 
``corresponding fee codes that add liquidity (i.e., B, V and Y)''. 
However, the proposed fee change incorrectly reflected the proposed 
$0.00009 subdollar rebate in footnote 7 of the Fee Schedule, which is 
appended not only to fee codes B, V and Y, but also to fee codes HB, 
HI, HV, HY, RP and ZA. As a result of this drafting error, the Fee 
Schedule incorrectly indicates that the $0.00009 subdollar rebate that 
was introduced for orders yielding fee codes B, V and Y in the 
September Filing also applies to fee codes HB, HI, HV, HY, RP and ZA. 
Therefore, the Exchange proposes to correct this inadvertent drafting 
error by removing footnote 7 from fee codes B, V and Y and adopting new 
footnote 19, appended to fee codes B, V and Y, to reflect the $0.00009 
rebate for orders in securities priced below $1.00, as well as revising 
footnote 7 to provide, as it did prior to the September Filing, that no 
charge or rebate will be applied to orders in securities priced below 
$1.00 that yield the fee codes to which footnote 7 remains appended 
(HB, HI, HV, HY, RP and ZA). The Exchange notes that the proposed rule 
change is merely corrective in nature and does not change any rates 
that are currently applied to orders that yield fee codes B, V, Y, HB, 
HI, HV, HY, RP and ZA.
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    \3\ See Securities Exchange Act Release No. 89974 (September 23, 
2020), 85 FR 61071 (September 29, 2020) (SR-CboeBZX-2020-071).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\4\ in general, and 
furthers the objectives of Section 6(b)(4),\5\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and issuers and other persons 
using its facilities. The Exchange also believes that the proposed rule 
change is consistent with the objectives of Section 6(b)(5) \6\ 
requirements that the rules of an exchange be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system, and, in general, to 
protect investors and the public interest, and, particularly, is not 
designed to permit

[[Page 73541]]

unfair discrimination between customers, issuers, brokers, or dealers.
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    \4\ 15 U.S.C. 78f.
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ 15 U.S.C. 78f.(b)(5).
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    The Exchange believes that the proposed change is reasonable, 
equitable and not unfairly discriminatory as it does not change the 
fees or rebates assessed by the Exchange, but rather corrects an 
inadvertent drafting error that amended a footnote in the Fee Schedule 
appended to fee codes for which the Exchange did not intend the rebate 
change proposed in the September Filing to apply. As an unintended 
result of a drafting error in the September Filing to change language 
in footnote 7 to reflect updated rebates applicable only to orders that 
yield fee codes B, V and Y, the Fee Schedule is missing rebate-related 
language that applies to orders that yield fee codes HB, HI, HV, HY, RP 
and ZA, to which footnote 7 is also appended. The Exchange believes 
that adopting footnote 19 to instead reflect the recently adopted rates 
for orders in securities priced below $1.00 that yield fee codes B, V 
and Y and revising footnote 7 to again reflect the correct rates for 
the fee codes to which it is appended (HB, HI, HV, HY, RP and ZA) would 
reduce confusion around the Exchange's current rates and ensure that 
these fees are appropriately referenced in the Fee Schedule. The rates 
described in the proposed language in footnote 7 are the same as the 
rates identified for fee codes HB, HI, HV, HY, RP and ZA prior to the 
inadvertent change to this language in the September Filing, and the 
Fee Schedule is also being amended to explicitly provide for the new 
rates applicable to fee codes B, V and Y, pursuant to the September 
Filing, in proposed footnote 19. The Exchange believes that these steps 
will help ensure that its Fee Schedule fully and accurately represents 
the rates assessed for orders in securities priced below $1.00 that 
yield fee codes HB, HI, HV, HY, RP and ZA, as well as B, V and Y, as 
previously filed with the Commission. The Exchange again notes that the 
proposed rule change is merely corrective in nature and does not change 
any rates that are currently applied to orders that yield fee codes B, 
V, Y, HB, HI, HV, HY, RP and ZA.

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 intramarket or intermarket competition that is not 
necessary or appropriate in furtherance of the purposes of the Act 
because the proposed rule change merely corrects an inadvertent 
drafting error and is designed to reduce potential confusion regarding 
the appropriate subdollar rates referenced in the footnotes in the Fee 
Schedule. The Exchange believes that this change would add clarity and 
increase transparency to the benefit of Members and investors without 
having any impact on competition.

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

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

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \7\ and paragraph (f) of Rule 19b-4 
thereunder.\8\ At any time within 60 days of the filing of the proposed 
rule change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

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

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-CboeBZX-2020-084 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-2020-084. 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-CboeBZX-2020-084 and should be submitted 
on or before December 9, 2020.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-25384 Filed 11-17-20; 8:45 am]
BILLING CODE 8011-01-P