Document ID: SEC-2023-1197-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc.
Posted Date: 2023-10-17T04:00Z

[Federal Register Volume 88, Number 199 (Tuesday, October 17, 2023)]
[Notices]
[Pages 71619-71621]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-22812]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98722; File No. SR-CBOE-2023-060]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Fees for the Cboe Silexx Platform

October 11, 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 October 5, 2023, Cboe Exchange, Inc. (the ``Exchange'' or 
``Cboe Options'') filed with the Securities and Exchange Commission 
(the ``Commission'') the proposed rule change as described in Items I, 
II, and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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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 Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes 
to amend fees for the Cboe Silexx platform. The text of the proposed 
rule change is provided in Exhibit 5.
    The text of the proposed rule change is also available on the 
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, and at the Commission's Public Reference Room.

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

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

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

1. Purpose
    The Exchange proposes to amend fees for the Cboe Silexx platform 
(``Cboe Silexx''), effective September 29, 2023.\3\ By way of 
background, the Silexx platform consists of a ``front-end'' order entry 
and management trading platform (also referred to as the ``Silexx 
terminal'') for listed stocks and options that supports both simple and 
complex orders, and a ``back-end'' platform which provides a connection 
to the infrastructure network. From the Silexx platform (i.e., the 
collective front-end and back-end platform), a Silexx user has the 
capability to send option orders to U.S. options exchanges, send stock 
orders to U.S. stock exchanges (and other trading centers), input 
parameters to control the size, timing, and other variables of their 
trades, and also includes access to real-time options and stock market 
data, as well as access to certain historical data. The Silexx platform 
is designed so that a user may enter orders into the platform to send 
to an executing broker (including Trading Permit Holders (``TPHs'')) of 
its choice with connectivity to the platform, which broker will then 
send the orders to Cboe Options (if the broker is a TPH) or other U.S. 
exchanges (and trading centers) in accordance with the user's 
instructions. The Silexx front-end and back-end platforms are a 
software application that is installed locally on a user's desktop. 
Silexx grants users licenses to use the platform, and a firm or 
individual does not need to be a TPH to license the platform.
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    \3\ The Exchange initially filed the proposed fee changes on 
September 29, 2023 (SR-CBOE-2023-059). On October 5, 2023, the 
Exchange withdrew that filing and submitted this proposal.
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    The Exchange offers several versions of its Silexx platform. 
Originally, the Exchange offered the following versions of the Silexx 
platform: Basic, Pro, Sell-Side, Pro Plus Risk and Buy-Side Manager 
(``Legacy Platforms''). The Legacy Platforms are designed so that a 
User may enter orders into the platform to send to the executing 
broker, including TPHs, of its choice with connectivity to the 
platform. The executing broker can then send orders to Cboe Options (if 
the broker-dealer is a TPH) or other U.S. exchanges (and trading 
centers) in accordance with the User's instructions. Users cannot 
directly route orders through any of the Legacy Platforms to an 
exchange or trading center nor is the platform

[[Page 71620]]

integrated into or directly connected to Cboe Option's System. In 2019, 
the Exchange made available a new version of the Silexx platform, 
Silexx FLEX, which supports the trading of FLEX Options and allows 
authorized Users with direct access to the Exchange.\4\ In 2020, the 
Exchange made an additional version of the Silexx platform available, 
Cboe Silexx, which supports the trading of non-FLEX Options and allows 
authorized Users with direct access to the Exchange.\5\ Cboe Silexx is 
essentially the same platform as Silexx FLEX, with the same applicable 
functionality, except that it additionally supports direct access for 
non-FLEX trading. Use of any version of the Silexx platform is 
completely optional.
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    \4\ See Securities Exchange Act Release No. 87028 (September 19, 
2019) 84 FR 50529 (September 25, 2019) (SR-CBOE-2019-061). Only 
Users authorized for direct access and who are approved to trade 
FLEX Options may trade FLEX Options via Cboe Silexx.
    \5\ See Securities Exchange Act Release No. 88741 (April 24, 
2020) 85 FR 24045 (April 30, 2020) (SR-CBOE-2020-040). Only 
authorized Users and associated persons of Users may establish 
connectivity to and directly access the Exchange, pursuant to Rule 
5.5.
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    The Exchange has also assessed Login ID fees for each Silexx 
Platform. Particularly, the Exchange assesses the following monthly 
fees (per Login ID): $200 for Basic, $400 for Pro, $475 for Sell-Side, 
$600 for Pro Plus Risk, $300 for Buy-Side Manager, and with respect to 
Cboe Silexx, $399 for the first 16 Login IDs, $299 per each additional 
Login ID for the next 16 Login IDs, and a fee of $199 per each 
additional Login ID thereafter (i.e., 33+ Login IDs). No fee is 
assessed for Silexx FLEX. The Exchange also charges a Market Data Feeds 
fee, for connections to other market data feeds. For the Market Data 
Feeds fee, the fee is the actual cost, determined on a time (per hour) 
and materials basis, which is passed through to the user.
    The Exchange is transitioning the Legacy Platforms to the current 
version of Cboe Silexx.\6\ While each user completes the transition, 
they may choose to have access to both the old and new versions of Cboe 
Silexx. Once their transition is complete, the user will only have 
access to the new version. The Exchange proposes to provide for a 
waiver of any duplicative fees incurred because of the transition.
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    \6\ Only authorized Users and associated persons of Users will 
continue to be able to establish connectivity to and directly access 
the Exchange, pursuant to Rule 5.5. Unauthorized Users will not be 
able to connect directly to the Exchange. The new Cboe Silexx 
platform will function in the same manner as the Legacy Platforms 
versions currently available to Users: it will be completely 
voluntary; orders entered through the platform will receive no 
preferential treatment as compared to orders electronically sent to 
Cboe Options in any other manner; orders entered through the 
platform will be subject to current trading rules in the same manner 
as all other orders sent to the Exchange, which is the same as 
orders that are sent through the Exchange's System today; the 
Exchange's System will not distinguish between orders sent from 
Silexx and orders sent in any other manner; and Silexx will provide 
technical support, maintenance and user training for the new 
platform version upon the same terms and conditions for all Users. 
The Exchange plans to decommission the Legacy Platforms at a future 
to-be-determined date, at which time the Legacy Platforms will be 
unavailable to users.
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    Specifically, the Exchange proposes a waiver for new users of Cboe 
Silexx who are migrating from the Legacy Platforms of any Cboe Silexx 
Login ID fees that are incurred during the migration for up to two 
months. Login ID fees for the Legacy Platforms will continue to apply 
to migrating users, as applicable (i.e., to extent users which to 
retain the ability to login to both versions of the platform during the 
migration period). Similarly, the Exchange proposes a waiver of any 
duplicative Market Data Feeds fees incurred by users during the 
migration to the new Cboe Silexx since, while each user completes the 
transition, they could receive market data on both versions (old and 
new) of the platform.
    The proposed waivers will allow users of Cboe Silexx to transition 
to the new version of the platform without incurring duplicative Login 
ID and Market Data Feed fees for access to both the old and new 
versions of Cboe Silexx during this transitional period. The Exchange 
also believes not assessing duplicative fees for Users transitioning to 
Cboe Silexx will serve as an incentive to market participants to start 
using the Cboe Silexx platform, while also providing time and 
flexibility for such Users to become familiar with and fully acclimated 
to the new platform.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Securities Exchange Act of 1934 (the ``Act'') and the rules and 
regulations thereunder applicable to the Exchange and, in particular, 
the requirements of Section 6(b) of the Act.\7\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \8\ 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. Additionally, 
the Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. Additionally, the Exchange also believes the 
proposed rule change is consistent with Section 6(b)(4) of the Act, 
which requires that Exchange rules provide for the equitable allocation 
of reasonable dues, fees, and other charges among its Trading Permit 
Holders and other persons using its facilities.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ Id.
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    In particular, the Exchange believes the proposed rule change is 
reasonable, equitable, and not unfairly discriminatory because the fee 
waivers will apply to new users of Cboe Silexx who are migrating from 
the Legacy Platforms. The Exchange believes waiving the Login ID and 
Market Data Feed fees for Cboe Silexx during this transition period is 
reasonable because it will allow all TPHs that migrate to the Cboe 
Silexx platform to avoid having to pay duplicative fees that they would 
otherwise have to pay as a result of the migration to the platform. The 
waivers are also reasonable, equitable and not unfairly discriminatory 
because the waiver applies to users who are already subject to a 
monthly Login ID fee (albeit for the Legacy Platform), as well as 
Market Data Feed fees (for those receiving it on the Legacy Platform). 
Additionally, the fee waiver period will be limited to the timeframe 
during which such Users have access to the old and new version of Cboe 
Silexx and would otherwise result in duplicative fees. The Exchange 
further believes a fee waiver of two months is an appropriate and 
reasonable amount of time for Users to become familiar with and fully 
acclimated to the new platform and therefore able to terminate their 
connection to the Legacy Platforms.
    Finally, the Exchange notes that use of the platform, is 
discretionary and not compulsory, as users can choose to route orders, 
including to Cboe Options, without the use of the platform. The 
Exchange makes the platform available as a convenience to market 
participants, who will continue to have the option to use any order 
entry and management system available in the marketplace to send orders 
to the Exchange and other exchanges; the platform is merely an 
alternative offered by the Exchange.

[[Page 71621]]

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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. The proposed change will not 
impose any burden on intramarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because proposed 
rule change applies to all users who are migrating to Cboe Silexx from 
the Legacy Platforms and are already paying Login ID and/or market data 
fees, as applicable. Further, the proposed rule change relates to an 
optional platform. The proposed fee amendments will apply to similarly 
situated participants uniformly, as described in detail above. As 
discussed, the use of the platform continues to be completely voluntary 
and market participants will continue to have the flexibility to use 
any entry and management tool that is proprietary or from third-party 
vendors, and/or market participants may choose any executing brokers to 
enter their orders. The Cboe Silexx platform is not an exclusive means 
of trading, and if market participants believe that other products, 
vendors, front-end builds, etc. available in the marketplace are more 
beneficial than Cboe Silexx, they may simply use those products 
instead. Use of the functionality is completely voluntary.
    The Exchange does not believe that the proposed rule changes will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act because the 
proposed change applies only to Cboe Options. Additionally, Cboe Silexx 
is similar to types of products that are widely available throughout 
the industry, including from some exchanges, at similar prices. To the 
extent that the proposed changes make Cboe Options a more attractive 
marketplace for market participants at other exchanges, such market 
participants are welcome to become Cboe Options market participants.

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 \10\ and paragraph (f) of Rule 19b-4 \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 will institute proceedings to 
determine whether the proposed rule change should be approved or 
disapproved.
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CBOE-2023-060 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to file number SR-CBOE-2023-060. 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-CBOE-2023-060 and should be 
submitted on or before November 7, 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. 2023-22812 Filed 10-16-23; 8:45 am]
BILLING CODE 8011-01-P