Document ID: SEC-2023-0156-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc.
Posted Date: 2023-02-14T05:00Z

[Federal Register Volume 88, Number 30 (Tuesday, February 14, 2023)]
[Notices]
[Pages 9548-9550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-03061]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-96844; File No. SR-CBOE-2023-010]

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

February 8, 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 February 2, 2023 Cboe Exchange, Inc. (``Cboe Options'' or the 
``Exchange'') 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.

[[Page 9549]]

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 February 1, 2023. 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.
    In 2020, the Exchange made a new version of the Silexx platform 
available, Cboe Silexx, which supports the trading of non-FLEX Options 
\3\ and allows authorized Users with direct access to the Exchange.\4\ 
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. Use of any version of the Silexx 
platform is completely optional.
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    \3\ In 2019, the Exchange made available an additional version 
of the Silexx platform, Silexx FLEX, which supports the trading of 
FLEX Options and allows authorized Users with direct access to the 
Exchange. See Securities Exchange Act Release No. 87028 (September 
19, 2019) 84 FR 50529 (September 25, 2019) (SR-CBOE-2019-061).
    \4\ See Securities Exchange Act Release No. 88741 (April 24, 
2020) 85 FR 24045 (April 30, 2020) (SR-CBOE-2020-040).
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    The Exchange has established a fee structure for Cboe Silexx, based 
on Login IDs and set forth in the Silexx Fees Schedule.\5\ Currently, 
there is a monthly fee of $275 per Login ID for the first 8 Login IDs 
(i.e., Logins Ids 1-8), a fee of $100 per each additional Login ID for 
the next 8 Login IDs (i.e., Login IDs 9-16), and each Login ID 
thereafter is free (i.e., 17+ Login IDs).
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    \5\ See Securities Exchange Act Release No. 89830 (September 11, 
2020) 85 FR 58093 (September 17, 2020) (SR-CBOE-2020-085).
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    The Exchange proposes to amend the fees for Cboe Silexx and update 
the Silexx Fees Schedule to reflect the new fees. Particularly, the 
Exchange proposes to adopt a monthly fee of $399 per Login ID for the 
first 8 Login IDs (i.e., Login IDs 1-8), a fee of $299 per each 
additional Login ID for the next 8 Login IDs (i.e., Login IDs 9-16), 
and a fee of $199 per each additional Login ID thereafter (i.e., 17+ 
Login IDs). The fee will continue to be waived for the first month for 
any new individual user; the waiver will apply to the month the Login 
ID is first purchased.\6\
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    \6\ For example, if an individual User subscribes to a Cboe 
Silexx Login ID on February 15th, the Login ID fee would be waived 
for the month of February only.
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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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    The Exchange believes that its proposed fees are reasonable and 
appropriate, because even as amended, they remain competitive with 
similar products available throughout the market, including other 
available platform versions on Silexx and a similar front-end order 
entry system offered by Nasdaq ISE (i.e., ISE's PrecISE terminals).\10\ 
The Exchange understands that the proposed pricing is also competitive 
with, and in some instances even lower than, similar unregulated 
products (for which there is no requirement for fees related to those 
products to be public). Additionally, use of Cboe Silexx 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. The Exchange believes the proposed 
fees amendments are equitable and not unfairly discriminatory because 
they apply to all market participants uniformly.
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    \10\ See Silexx Fees Schedule, which assesses between $200-$600 
per month for the remaining Silexx platforms, other than FLEX which 
is assessed no fee. See also Nasdaq ISE's Pricing Schedule, Section 
7, which provides for a PrecISE Trade Terminal monthly fee of $350 
per user for each of the 1st 10 users and $100 per month for each 
additional user.
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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 it 
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 the Cboe Silexx platform, they may 
simply use those

[[Page 9550]]

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)(ii) of the Act \11\ and Rule 19b-4(f)(2) \12\ thereunder.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 17 CFR 240.19b-4(f)(2).
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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 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 change 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 [email protected]. Please include 
File Number SR-CBOE-2023-010 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-2023-010. 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-CBOE-2023-010 and should be submitted on 
or before March 7, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-03061 Filed 2-13-23; 8:45 am]
BILLING CODE 8011-01-P