Document ID: SEC-2023-0751-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc.
Posted Date: 2023-07-19T04:00Z

[Federal Register Volume 88, Number 137 (Wednesday, July 19, 2023)]
[Notices]
[Pages 46315-46320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15270]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97902; File No. SR-CBOE-2023-033]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
its Fees Schedule

July 13, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 46316]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 30, 2023, Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe 
Options''), 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.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 its Fees 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://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 its Fees Schedule, effective July 3, 
2023.
XSP Fees
    The Exchange first proposes to adopt and amend certain fees related 
to transactions in Mini-SPX Index (``XSP'') options. Specifically, the 
proposed rule changes amends and adopts certain fees for XSP in the 
Rate Table for All Products Underlying Symbol List A, as follows:
     Amends fee code XC, appended to all Customer (capacity 
``C'') orders in XSP that are for less than 10 contracts and assesses 
no charge, to provide a rebate of $0.13 per contract.\3\
---------------------------------------------------------------------------

    \3\ The Exchange also proposes to update corresponding Footnote 
9 to reflect Customer orders in XSP for less than 10 contracts will 
receive a rebate (instead of no charge).
---------------------------------------------------------------------------

     Amends fee code CC, appended to all Customer (capacity 
``C'') orders in XSP that are for greater than or equal to 10 contracts 
and assesses a fee of $0.04 per contract, to assess a fee of $0.07 per 
contract.
     Adopts fee code MC, appended to all Market-Maker (capacity 
``M'') orders in XSP that are contra customer and assesses a fee of 
$0.15 per contract.
     Amends fee code MX, currently appended to all Market-Maker 
(capacity ``M'') orders in XSP and assesses a fee of $0.045, to apply 
to orders contra to non-customers and to assess a fee of $0.09 per 
contract.
     Amends fee code XF, appended to all Clearing Trading 
Permit Holders (``TPHs'') (capacity ``F'') and Non-Clearing TPH 
Affiliates (capacity ``L'') (collectively, ``Firms'') orders in XSP and 
assesses a fee of $0.06, to assess a fee of $0.13 per contract.
     Amends fee code XB, appended to all Broker-Dealer 
(capacity ``B''), Joint Back-Office (capacity ``J''), Non-TPH Market-
Maker (capacity ``N''), and Professional (capacity ``U'') 
(collectively, ``Non-Customers'') orders in XSP and assesses a fee of 
$0.08 per contract, to assess a fee of $0.17 per contract.
Customer Volume Incentive Program
    The Exchange proposes to amend the Customer Volume Incentive 
Program (``VIP''). The Exchange first notes that it operates in a 
highly competitive market in which market participants can readily 
direct order flow to competing venues if they deem fee levels at a 
particular venue to be excessive or incentives to be insufficient. More 
specifically, the Exchange is only one of 16 options venues to which 
market participants may direct their order flow. Based on publicly 
available information, no single options exchange has more than 17% of 
the market share.\4\ Thus, in such a low-concentrated and highly 
competitive market, no single options exchange possesses significant 
pricing power in the execution of option order flow. The Exchange 
believes that the ever-shifting market share among the exchanges from 
month to month demonstrates that market participants can shift order 
flow, or discontinue to reduce use of certain categories of products, 
in response to fee changes. Accordingly, competitive forces constrain 
the Exchange's transaction fees, and market participants can readily 
trade on competing venues if they deem pricing levels at those other 
venues to be more favorable. In response to the competitive 
environment, the Exchange offers tiered pricing in its Fees Schedule, 
like that of other options exchanges fees schedules,\5\ which provides 
TPHs opportunities to qualify for higher rebates or reduced fees where 
certain volume criteria and thresholds are met. Tiered pricing provides 
an incremental incentive for TPHs to strive for higher tier levels, 
which provides increasingly higher benefits or discounts for satisfying 
increasingly more stringent criteria.
---------------------------------------------------------------------------

    \4\ See Cboe Global Markets U.S. Options Market Volume Summary 
(June 28, 2023), available at https://markets.cboe.com/us/options/market_statistics/.
    \5\ See e.g., NASDAQ Stock Market Rules, Options Rules, Options 
7 Pricing Schedule, Sec. 2 Options Market--Fees and Rebates, Tiers 
1-6; see also NYSE Arca Options, Fees and Charges, Customer Posting 
Credit Tiers in Non-Penny Issues.
---------------------------------------------------------------------------

    For example, under the VIP, the Exchange credits each TPH the per 
contract amount set forth in the VIP table for Public Customer (origin 
code ``C'') orders transmitted by TPHs (with certain exceptions) \6\ 
and executed electronically on the Exchange, provided the TPH meets 
certain volume thresholds in a month; volume for Professional Customers 
and Voluntary Professionals (``Professional Customers'') (origin code 
``W''), Broker-Dealers (origin code ``B''), and Joint Back-Offices 
(``JBO'') (origin code ``J'') orders are counted toward reaching such 
thresholds.\7\
---------------------------------------------------------------------------

    \6\ See Cboe Options Fees Schedule, Footnote 36.
    \7\ See Cboe Options Fees Schedule, Volume Incentive Program.
---------------------------------------------------------------------------

    The VIP offers both rates for Complex and Simple orders. The VIP 
provides however, that a TPH will only receive the Complex credit rates 
for both its Complex AIM and Non-AIM volume if at least 38% of that 
TPH's qualifying VIP volume (in both AIM and Non-AIM) in the previous 
month was comprised of Simple volume. If the TPH's previous month's 
volume does not meet the 38% Simple volume threshold, then the TPH's 
Customer (C) Complex volume will receive credits at the Simple rate 
only (i.e., all volume, both Simple and Complex, will receive credits 
at the applicable Simple rate). The Exchange proposes to reduce the 38% 
threshold to 32%, for Tiers 1, 2, and 3 (the 38% threshold will 
continue to apply to Tiers 4 and 5). The proposed change is designed to 
increase the amount of volume TPHs provide on the Exchange

[[Page 46317]]

and further encourage them to contribute to a deeper, more liquid 
market, as well as to increase transactions and take such execution 
opportunities provided by such increased liquidity, while implementing 
an incremental incentive for TPHs to strive for the highest level. The 
Exchange believes the proposed change will still encourage TPHs to 
continue to send both Simple and Complex volume to the Exchange.
    Further, the Exchange proposes to increase the VIP credit rates for 
complex orders in Tier 3 from $0.24 to $0.23 per contract for non-AIM 
volume and from $0.22 to $.021 per contract for AIM volume.
MRUT LMM Incentive Program
    Finally, the Exchange proposes to amend its Mini-Russell 2000 Index 
option (``MRUT'') Lead Market-Maker (``LMM'') Incentive Program. The 
Exchange offers several LMM Incentive Programs which provide a rebate 
to TPHs with LMM appointments to the respective incentive program that 
meet certain quoting standards in the applicable series in a month. The 
Exchange notes that meeting or exceeding the quoting standards (both 
current and as proposed; described in further detail below) in each of 
the LMM Incentive Program products to receive the applicable rebate 
(both currently offered and as proposed; described in further detail 
below) is optional for an LMM appointed to a program. Particularly, an 
LMM appointed to an incentive program is eligible to receive the 
corresponding rebate if it satisfies the applicable quoting standards, 
which the Exchange believes encourages appointed LMMs to provide 
liquidity in the applicable class and trading session (i.e., Regular 
Trading Hours (``RTH'') or Global Trading Hours). The Exchange may 
consider other exceptions to the programs' quoting standards based on 
demonstrated legal or regulatory requirements or other mitigating 
circumstances. In calculating whether an LMM appointed to an incentive 
program meets the applicable program's quoting standards each month, 
the Exchange excludes from the calculation in that month the business 
day in which the LMM missed meeting or exceeding the quoting standards 
in the highest number of the applicable series.
    The Exchange proposes to amend the current MRUT LMM Incentive 
Program. Currently, the MRUT LMM Incentive Program provides that, for 
MRUT, if the appointed LMM provides continuous electronic quotes during 
RTH that meet or exceed the heightened quoting standards in at least 
99% of the MRUT series 90% of the time in a given month, the LMM will 
receive a rebate for that month in the amount of $15,000 (or pro-rated 
amount if an appointment begins after the first trading day of the 
month or ends prior to the last trading day of the month). The Exchange 
now proposes to amend the series qualification requirement for the MRUT 
LMM Incentive Program. Specifically, the Exchange proposes to update 
the series qualification requirement to require the appointed LMM to 
provide continuous electronic quotes during RTH that meet or exceed the 
heightened quoting standards in at least 97% the MRUT series 90% of the 
time in a given month in order to receive the rebate, thereby 
decreasing the series qualification requirement by 2%. In changing this 
requirement, the Exchange wishes to encourage LMMs appointed to the 
MRUT LMM Incentive Program to provide significant liquidity in MRUT 
options by meeting the series qualification requirements (and relevant 
quoting standards) under the Program in order to receive the rebate.
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.\8\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \9\ 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) \10\ requirement that the rules of an exchange not be 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers. The Exchange also believes the proposed rule 
change is consistent with Section 6(b)(4) of the Act,\11\ which 
requires that Exchange rules provide for the equitable allocation of 
reasonable dues, fees, and other charges among its TPHs and other 
persons using its facilities.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ Id.
    \11\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes that the proposed fees for Customer, Market-
Maker, Firm and Non-Customer orders in XSP are reasonable, equitable 
and not unfairly discriminatory. The Exchange notes that the proposed 
transactions fees for Customer orders in XSP that are for more than 10 
contracts, as well as for Market-Maker, Firm and Non-Customer orders in 
XSP, remain lower than that of the similar market participant fees 
associated with other index products.\12\ Further, the Exchange 
believes that it is equitable and not unfairly discriminatory to 
provide a rebate of $0.13 for all Customer orders in XSP that are for 
less than 10 contracts, as such rebate is designed to incentivize 
Customer volume in XSP on the Exchange. Additionally, the Exchange 
believes it is equitable and not unfairly discriminatory to establish a 
fee structure for Market-Maker orders in XSP, based on contra-party, 
and to adopt a new fee code specific to Market-Maker orders in XSP that 
are contra customer, as such changes are also designed to incentivize 
an increase in Customer volume in XSP on the Exchange. The Exchange 
believes that incentivizing more Customer orders in XSP will create 
more trading opportunities, which, in turn attracts Market-Makers. A 
resulting increase in Market-Maker activity facilitates tighter 
spreads, which may lead to additional increase of order flow in XSP 
from other market participants, further contributing to a deeper, more 
liquid market to the benefit of all market participants by creating a 
more robust and well-balanced market ecosystem. Further, the Exchange 
believes that the changes are reasonable and that the fees, even as 
amended, will continue to incentivize Members to send additional 
Market-Maker orders to the Exchange.
---------------------------------------------------------------------------

    \12\ See Cboe Options Fee Schedule, ``Index Options Rate Table--
All Index Products Excluding Underlying Symbol List A and Sector 
Indexes''.
---------------------------------------------------------------------------

    The Exchange believes that the proposed fees for Customer, Market-
Maker, Firm and Non-Customer orders in XSP are equitable and not 
unfairly discriminatory because the proposed fees will apply 
automatically and uniformly to all Customer, Market-Maker, Firm and 
Non-Customer orders in XSP.
    The Exchange believes the proposed amendment to the VIP, to 
decrease the percentage of TPH qualifying VIP volume (in both AIM and 
Non-AIM) that must be comprised of Simple volume in

[[Page 46318]]

order to receive the complex rates for both Complex AIM and Non-AIM 
volume for Tiers 1 through 3, is reasonable because it makes it 
slightly easier for TPHs to meet the qualifying criteria to receive the 
Complex credits in Tiers 1 through 3. The Exchange notes that the VIP 
will continue to provide an incremental incentive for TPHs to strive 
for the highest tier level, which provides increasingly higher credits, 
for both Complex and Simple volume. The Exchange believes the proposed 
change is equitable and not unfairly discriminatory because the 
proposed changes apply to all TPHs uniformly.
    Further, the Exchange believes that decreasing the VIP credit rates 
for complex orders in Tier 3 is reasonable because it will still allow 
all TPHs transmitting public customer complex orders that reach the 
Tier 3 volume thresholds to receive a credit for doing so (albeit at 
slightly lower amounts). The proposed complex credit rates for Tier 3 
also do not represent a significant departure from the credit rates 
offered under the existing Tier 3 and are therefore still reasonable 
based on the difficulty of satisfying the tier's criteria and ensures 
the proposed credit rates, along with the existing threshold, 
appropriately reflect the incremental difficulty to achieve VIP Tier 3.
    The Exchange believes that the proposed changes to the VIP are 
reasonable, equitable and not unfairly discriminatory, as such changes 
should continue to incentivize the sending of more complex orders to 
the Exchange. This should provide greater liquidity and trading 
opportunities, including for market participants who send simple orders 
to the Exchange (as simple orders can trade with the legs of complex 
orders). The greater liquidity and trading opportunities should benefit 
not just public customers (whose orders are the only ones that qualify 
for the VIP) but all market participants.
    The Exchange believes that the proposal represents an equitable 
allocation of rebates and is not unfairly discriminatory because all 
TPHs have the opportunity to meet the proposed Simple volume thresholds 
in Tiers 1 through 3, to receive the complex rates for both Complex AIM 
and Non-AIM volume for Tiers 1 through 3. Given that TPHs change their 
trading strategies and patterns month-to-month to align with changing 
market trends and conditions, as well as pricing and functionality 
changes across other exchanges, and without having a view of activity 
on other markets and off-exchange venues, the Exchange has no way of 
knowing whether this proposed rule change would definitively result in 
a shift of TPHs qualifying for the proposed tiers. While the Exchange 
has no way of predicting with certainty how the rule change will impact 
TPHs, the Exchange anticipates the impact of the proposed change to be 
minimal in at least one TPH will be able to reach Tier 2, as amended, 
and two TPHs will be able to reach Tier 3, as amended. As stated, the 
Exchange believes that the proposed changes do not represent a 
significant departure from the current required criteria, is still 
reasonable based on the difficulty of satisfying each tier's criteria, 
and is appropriately aligned with the incremental difficulty to achieve 
the existing VIP tiers. As such, the Exchange does not anticipate the 
proposed change to impact the number of firms that compete across all 
tiers, but instead encourages competition by encouraging an increase in 
order flow in order to qualify for contract credits. Therefore, the 
Exchange does not believe that the proposed changes are unfairly 
discriminatory as it would not impact the range of typical competition 
across such tiers.
    The Exchange believes it is reasonable to decrease the series 
requirement for the MRUT LMM Incentive Program to 97% (from 99%), as 
such changes are reasonably designed to slightly ease the difficulty in 
meeting the heightened quoting standards offered under these programs 
(for which an appointed LMM receives the respective rebates), which, in 
turn, provides increased incentive for LMMs appointed to these programs 
to provide significant liquidity in MRUT options. Such liquidity 
benefits all market participants by providing more trading 
opportunities, tighter spreads, and added market transparency and price 
discovery, and signals to other market participants to direct their 
order flow to those markets, thereby contributing to robust levels of 
liquidity.
    The Exchange believes that the proposed changes to the LMM 
Incentive Program is equitable and not unfairly discriminatory. The 
Exchange believes that it is equitable and not unfairly discriminatory 
to amend the series qualification requirement for the MRUT LMM 
Incentive Program, because such series qualification requirement will 
equally apply to any and all TPHs with LMM appointments to the MRUT LMM 
Incentive Program that seek to meet the program's heightened quoting 
standard in order to receive the rebate offered under the program. The 
Exchange additionally notes that, if an LMM appointed to the LMM 
Incentive Program does not satisfy the corresponding heightened quoting 
standard for any given month, then it simply will not receive the 
rebate offered by the respective program for that month.
    Regarding the MRUT LMM Incentive Program generally, the Exchange 
believes it is reasonable, equitable and not unfairly discriminatory to 
continue to offer these financial incentives, including as amended, to 
LMMs appointed to the program, because it benefits all market 
participants trading in MRUT options during RTH. This incentive program 
encourages the LMMs appointed to such program to satisfy the heightened 
quoting standards, which may increase liquidity and provide more 
trading opportunities and tighter spreads. Indeed, the Exchange notes 
that these LMMs serve a crucial role in providing quotes and the 
opportunity for market participants to trade MRUT options, as 
applicable, which can lead to increased volume, providing for robust 
markets. The Exchange ultimately offers the LMM Incentive Program, as 
amended, to sufficiently incentivize LMMs appointed to the incentive 
program to provide key liquidity and active markets in the 
corresponding program products during the corresponding trading 
sessions, and believes that these incentive program, as amended, will 
continue to encourage increased quoting to add liquidity in MRUT, 
thereby protecting investors and the public interest. The Exchange also 
notes that an LMM appointed to an incentive program may undertake added 
costs each month to satisfy that heightened quoting standards (e.g., 
having to purchase additional logical connectivity).

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 Exchange does not 
believe that the proposed rule change will impose any burden on 
intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act. The amendments to XSP fees will 
apply to all similarly situated TPHs equally, the VIP will apply to all 
TPHs submitting qualified orders equally, and the amendments to the 
MRUT LMM Incentive Program will apply uniformly to any LMM appointment 
to the programs.
    The Exchange believes that providing a rebate of $0.13 for Customer 
orders in XSP that are for less than 10 contracts will incentivize 
Customer volume in XSP on the Exchange. Further, the

[[Page 46319]]

proposed change to establish a fee structure for Market-Maker orders in 
XSP, based on contra-party, and adopt a new fee code specific to 
Market-Maker orders in XSP that are contra customer, is designed to 
incentivize an increase in Customer volume in XSP on the Exchange. As 
noted above, Customer order flow, importantly, provides increased 
trading opportunities signaling additional liquidity and ultimately 
enhancing overall market quality. Further, preferential pricing to 
Customers is a long-standing options industry practice.\13\
---------------------------------------------------------------------------

    \13\ See e.g., NYSE American Options Fee Schedule, Section I.A, 
Options Transaction Fees and Credits: Rates for Options 
transactions; and MIAX Options Fee Schedule, Section (b)(1), 
Proprietary Products Exchange Fees: SPIKES, each of which assesses a 
lower transaction fee for customer orders than that of other market 
participants.
---------------------------------------------------------------------------

    As discussed above, the Exchange believes the proposed VIP changes 
would continue to incentivize the sending of more complex orders to the 
Exchange, which in turn would encourage the submission of additional 
liquidity to a public exchange, thereby promoting market depth, price 
discovery and transparency and enhancing order execution opportunities 
for all TPHs. The Exchange believes the proposed change to decrease the 
percentage of TPH qualifying VIP volume (in both AIM and Non-AIM) that 
must be comprised of Simple volume in order to receive the complex 
rates for both Complex AIM and Non-AIM volume for Tiers 1 through 3 
will continue to provide an incremental incentive for TPHs to strive 
for the highest tier level, which provides increasingly higher credits, 
for both Complex and Simple volume, thus incentivizing order flow to 
the Exchange. Further, the Exchange believes the change to decrease the 
VIP credit rates for complex orders in Tier 3 remain in line to the 
amounts of credits paid to market participants by another exchange for 
similar transactions and do not represent a significant departure from 
the credit rates offered under the existing Tier 3.
    Finally, in regard to the MRUT LMM Incentive Program, to the extent 
LMMs appointed to this programs receive a benefit that other market 
participants do not, as stated, these LMMs in their role as Market-
Makers on the Exchange have different obligations and are held to 
different standards. An LMM appointed to an incentive program may also 
undertake added costs each month to satisfy that heightened quoting 
standards (e.g., having to purchase additional logical connectivity). 
The Exchange also notes that the proposed changes are designed to 
attract additional order flow to the Exchange, wherein greater 
liquidity benefits all market participants by providing more trading 
opportunities, tighter spreads, and added market transparency and price 
discovery, and signals to other market participants to direct their 
order flow to those markets, thereby contributing to robust levels of 
liquidity.
    As a result of the above, the Exchange believes that the proposed 
changes furthers the Commission's goal in adopting Regulation NMS of 
fostering competition among orders, which promotes ``more efficient 
pricing of individual stocks for all types of orders, large and 
small.'' \14\
---------------------------------------------------------------------------

    \14\ Securities Exchange Act Release No. 51808, 70 FR 37495, 
37498-99 (June 29, 2005) (S7-10-04) (Final Rule).
---------------------------------------------------------------------------

    The Exchange does not believe that the proposed rule change will 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. The Exchange 
notes that it operates in a highly competitive market. TPHs have 
numerous alternative venues that they may participate on and direct 
their order flow, including 16 other options exchanges, as well as off-
exchange venues, where competitive products are available for trading. 
Based on publicly available information, no single options exchange has 
more than 17% of the market share.\15\ Therefore, no exchange possesses 
significant pricing power in the execution of option order flow. 
Indeed, participants can readily choose to send their orders to other 
exchange, and, additionally off-exchange venues, if they deem fee 
levels at those other venues to be more favorable. Moreover, the 
Commission has repeatedly expressed its preference for competition over 
regulatory intervention in determining prices, products, and services 
in the securities markets. Specifically, in Regulation NMS, 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.'' \16\ The fact that this market is 
competitive has also 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'. . ..''.\17\ Accordingly, the Exchange 
does not believe its proposed fee change imposes any burden on 
competition that is not necessary or appropriate in furtherance of the 
purposes of the Act.
---------------------------------------------------------------------------

    \15\ See supra note 4.
    \16\ See Securities Exchange Act Release No. 51808 (June 9, 
2005), 70 FR 37496, 37499 (June 29, 2005).
    \17\ NetCoalition v. SEC, 615 F.3d 525, 539 (D.C. Cir. 2010) 
(quoting Securities Exchange Act Release No. 59039 (December 2, 
2008), 73 FR 74770, 74782-83 (December 9, 2008) (SR-NYSEArca-2006-
21)).
---------------------------------------------------------------------------

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 \18\ and paragraph (f) of Rule 19b-4 \19\ 
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.
---------------------------------------------------------------------------

    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 17 CFR 240.19b-4(f).
---------------------------------------------------------------------------

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-2023-033 on the subject line.

[[Page 46320]]

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-2023-033. 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 offices 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-2023-033, and should be 
submitted on or before August 9, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
---------------------------------------------------------------------------

    \20\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-15270 Filed 7-18-23; 8:45 am]
BILLING CODE 8011-01-P