Document ID: SEC-2021-0338-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc.
Posted Date: 2021-03-10T05:00Z

[Federal Register Volume 86, Number 45 (Wednesday, March 10, 2021)]
[Notices]
[Pages 13776-13778]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04913]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-91259; File No. SR-CBOE-2021-014]

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

March 4, 2021.
    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 25, 2021, 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 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 COVID-19 Test Fee which it 
recently adopted in connection with the COVID-19 pandemic. By way of 
background, on March 16, 2020, the Exchange suspended open outcry 
trading to help prevent the spread of COVID-19 \3\ and was operating in 
an all-electronic configuration until June 15, 2020. On June 15, 2020, 
the Exchange reopened its trading floor, but with a modified 
configuration of trading crowds in order to implement social distancing 
and other measures consistent with local and state health and safety 
guidelines to help protect the safety and welfare of individuals 
accessing the trading floor. In order to further protect the safety and 
welfare of individuals accessing the trading floor during the COVID-19 
pandemic, the Exchange determined to implement on-site COVID-19 testing 
for all trading floor personnel, beginning November 16, 2020. The 
Exchange has contracted with an independent health care provider who 
conducts the tests, which the Exchange currently conducts twice each 
week. The Exchange currently assesses a fee of $150 per test, per 
Trading Permit Holder (``TPH'') or associated person of a TPH \4\ that 
is tested, which is the same amount the Exchange is charged by the 
independent health care provider conducting the tests (i.e., the 
Exchange passes through its costs). The COVID-19 Test Fee allows the 
Exchange to offset the costs incurred with on-site testing.
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    \3\ On March 11, 2020, the World Health Organization 
characterized COVID-19 as a pandemic and to slow the spread of the 
disease, federal and state officials implemented social-distancing 
measures, placed significant limitations on large gatherings, 
limited travel, and closed non-essential businesses.
    \4\ For example, a TPH may have personnel other than Nominees on 
the floor that need to access the trading floor. Such persons will 
also be subject to testing requirements and will be assessed the 
proposed fee.
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    The Exchange wishes to amend the language in the Fees Schedule to 
provide generally that the Exchange will pass through the cost the 
Exchange is charged for each test, instead of specifying the exact 
amount (currently $150) in the Fees Schedule. In adopting the COVID-19 
Test Fee, the Exchange represented that the proposed fee is a pass-
through of the costs to the Exchange and that the Exchange will not 
generate any revenue in excess of those costs.\5\ Although the Exchange 
is currently still subject to the $150 rate (which it will continue to 
pass through), the proposed change provides flexibility should the rate 
change in the future. For example, if the independent health care 
provider lowers the rate they charge the Exchange for each test (e.g., 
lowers from $150 to $100), the Exchange can charge $100 per test, per 
TPH and associated person of a TPH, without having to submit an 
additional rule filing. The Exchange represents that it will continue 
to ensure it does not generate any revenue in excess of its costs 
associated with the tests. The Exchange also does not anticipate the 
cost exceeding the current rate of $150.
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    \5\ See Securities Exchange Release No. 90504 (November 24, 
2020) 85 FR 77295 (December 1, 2020) (SR-CBOE-2020-111).
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    The Exchange next proposes to provide that in certain limited 
circumstances, the Exchange will waive the costs of the test in its 
entirety, regardless of the cost to the Exchange. Particularly, the 
Exchange proposes to provide that it will not assess any fees, 
regardless of the cost to the Exchange, when test results are not 
received from the independent health care provider that conducts the 
tests in a timely manner. The Exchange notes the testing process is 
rolling and intended to capture any potential positive COVID cases. 
Accordingly, the Exchange does not believe it's appropriate or 
equitable to assess the fee if results are delivered past the time such 
results can no longer be utilized by the Exchange for its intended 
purpose.
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.\6\ Specifically, the 
Exchange believes the proposed rule change is consistent with the 
Section 6(b)(5) \7\ 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

[[Page 13777]]

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 Section 6(b)(4) of the 
Act,\8\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes the proposed change to the COVID-19 Test Fee 
is reasonable as the Exchange will continue to pass through the costs 
that the Exchange incurs per test. Indeed, the proposed change to 
replace the reference to the specific amount currently being passed 
through with general language providing the COVID-19 Test Fee is a 
pass-through of the Exchange's costs, merely provides the Exchange more 
flexibility to adapt to changing rates and avoids the administrative 
burden of submitting an additional rule filing each time the rate 
changes. As noted above, the Exchange does not currently anticipate 
that the COVD-19 Test Fee would increase above the current rate of $150 
per test, per TPH/associated person of a TPH. The fee the Exchange 
ultimately assesses to TPHs and associated persons of a TPH will always 
be the same amount that is assessed to the Exchange by the independent 
health care provider administering the tests. Also as noted above, the 
revenue generated from the proposed fee will continue to not be more 
than the cost to the Exchange for administering the tests. The Exchange 
further notes that to date, it has absorbed all other costs incurred in 
connection with the safety and health protocols it has taken to ensure 
the safety and welfare of individuals access the trading floor, 
including daily deep-cleaning of its facilities. The Exchange believes 
the proposed change is equitable and not unfairly discriminatory 
because it applies uniformly to any TPH or associated person of a TPH 
that is tested and accesses the trading floor.
    The Exchange believes the proposal to waive the fee in instances 
where the results of a test are not received in a timely manner by the 
Exchange from the independent health care provider is reasonable 
because TPHs and associated persons of TPHs will not be subject to a 
fee in such cases. The Exchange recognizes there may be unforeseen 
circumstances which may cause a delay of test results to be received 
(e.g., inclement weather). In such cases, the Exchange does not believe 
it's equitable or appropriate to continue to assess the COVID-19 Test 
Fee for impacted tests as the Exchange would not be able to utilize the 
results as intended. Lastly, the Exchange believes the proposed change 
to waive the fee when test results are delayed is equitable and not 
unfairly discriminatory because the waiver will be applied to any TPH 
or associated person of a TPH that is impacted by such delay.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition that are not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange notes the 
proposed change is not intended to address any competitive issue. 
Rather, the proposed changes relate to a pass-through fee that allows 
the Exchange to continue to recoup costs associated with COVID-19 
testing in order to help protect the safety and welfare of individuals 
access the trading floor. 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 because the proposed changes apply equally to all similarly 
situated market participants. 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 changes only affect trading on the 
Exchange in limited circumstances.

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 \9\ and paragraph (f) of Rule 19b-4 \10\ 
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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 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-CBOE-2021-014 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-2021-014. 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-2021-014 and

[[Page 13778]]

should be submitted on or before March 31, 2021.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-04913 Filed 3-9-21; 8:45 am]
BILLING CODE 8011-01-P