Document ID: SEC-2020-0357-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc.
Posted Date: 2020-03-12T04:00Z

[Federal Register Volume 85, Number 49 (Thursday, March 12, 2020)]
[Notices]
[Pages 14513-14515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05025]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88341; File No. SR-CBOE-2020-006]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
To Make Certain Non-Substantive Changes To Clean Up Its Fees Schedule

March 6, 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 February 26, 2020, 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 
Exchange filed the proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 
19b-4(f)(6) thereunder.\4\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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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 make certain non-substantive changes to clean up 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 Exchanges proposes to make certain nonsubstantive change to its 
Fees Schedule in connection with RLG, RLV, RUI and UKXM related fees, 
in connection with the Livevol Fees table, and in connection with rule 
references to Cboe Options Rules.
RLG, RLV, RUI and UKXM
    Currently, RLG, RLV, RUI and UKXM sit in line items in the Fees 
Schedule along with other products (e.g., VIX, OEX, XEO, and/or RUT) 
which have corresponding fee rates that are different than that of RLG, 
RLV, RUI and UKXM. Footnote 40 is appended to RLG, RLV, RUI and UKXM 
within these line items and states only that it is $0.00 for 
transactions in RLG, RLV, RUI and UKXM. The Exchange believes that 
footnote 40 is no longer necessary and

[[Page 14514]]

the manner in which it is currently appended to RLG, RLV, RUI and UKXM 
within certain line items along with other products that are instead 
assessed a fee is potentially confusing to market participants. As 
such, the Exchange proposes to amend the Fees Schedule to parse out 
RLG, RLV, RUI and UKXM as separate line items with a corresponding 
charge of $0.00 and to remove footnote 40. The Exchange believes that 
RLG, RLV, RUI and UKXM as a separate line item apart from other 
products that are currently assessed a fee will provide additional 
clarity and mitigate any confusion regarding the specific fee amounts 
charged to the corresponding products. The Exchange notes this will not 
amend the fees for any of these products.
Livevol Fees Table
    The Livevol Fees table shows the fees charged for receipt of 
historical Open-Close data per different packages (i.e., for one Cboe 
security, for all Cboe securities, and for all Cboe securities as a 
daily download) for different periods of time. Currently, the fees are 
listed for some data products on a per month basis, while the fees for 
other data products are listed on a per year basis. For example, the 
Livevol Fees table shows that for downloads of a Cboe security for one 
to nine years, the monthly rate is $4.50, while it shows that for 
downloads of a Cboe security for ten or more years, the annual rate is 
$270.00. The Exchange believes that it is potentially confusing to 
investors to display the rates for the same download in different 
increments of time. Therefore, the Exchange now proposes to amend the 
Livevol Fees table to make uniform the rates per increment of time and 
display all rates as a monthly rate. The Exchange notes that this will 
not change the rates or the timing in which these fees currently apply 
and are charged to market participants. For example, the proposed 
change will amend the download per Cboe security for ten or more years 
of historical data at $270.00 to instead display the price per month, 
which would be $2.25 (i.e., $2.25 x 12 months x 10 years). The proposed 
rule change is designed to present market participants with more 
precise rates and time frames for which they may currently request 
historical Open-Close data (i.e., a market participant may currently 
request historical data for 10.5 years and the Exchange would 
accordingly charge them the applicable rate broken down for 126 
months).
Rule Reference Updates
    In connection with a recent technology migration,\5\ Cboe Options 
updated and reorganized its entire Rulebook. In light of the 
reorganized Rulebook, the Exchange proposes to update cross-references 
to Cboe Options Rules within the Fees Schedule that have been relocated 
in the Cboe Options Rulebook. This includes updates to the rule 
references in the Marketing Fee table, the Sponsored User Fees table, 
the Sales Value Fee table, the Stock Portion of Stock-Option Strategy 
Orders table, the Regulatory Fees table, the Miscellaneous table, and 
in footnotes 15, 30, 36, 41 and 46. The Exchange notes that in the 
Stock Portion of Stock-Option Strategy Orders table, particularly, the 
proposed change removes the reference to stock-option orders executed 
via the splitting mechanism which is used for certain market orders 
pursuant to (prior) Interpretation .06(d) of Rule 6.53C. Pursuant to a 
migration-related rule filing,\6\ Interpretation .06(d) provided the 
Exchange with authority to determine on a class-by-class basis to 
permit unexecuted option legs of stock-option market orders to leg 
following a COA, and that the Exchange did not intend to permit this 
following the technology migration. As such, the Exchange no longer 
permits this and the proposed change merely updates the Fees Schedule 
to accurately reflect this rule change.
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    \5\ In 2016, the Exchange's parent company, Cboe Global Markets, 
Inc. (``Cboe Global''), which is also the parent company of Cboe C2 
Exchange, Inc. (``C2''), acquired Cboe EDGA Exchange, Inc. 
(``EDGA''), Cboe EDGX Exchange, Inc. (``EDGX'' or ``EDGX Options''), 
Cboe BZX Exchange, Inc. (``BZX'' or ``BZX Options''), and Cboe BYX 
Exchange, Inc. (``BYX'' and, together with Cboe Options, C2, EDGX, 
EDGA, and BZX, the ``Cboe Affiliated Exchanges''). On October 7, 
2019, Cboe Options migrated its trading platform to the same system 
used by the Cboe Affiliated Exchanges.
    \6\ See Securities Exchange Act Release No. 86772 (August 27, 
2019), 84 FR 46069 (September 3, 2019) (SR-CBOE-2019-042).
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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 
Section 6(b)(4) of the Act,\9\ 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\ 15 U.S.C. 78f(b)(4).
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    The Exchange believes that the proposed changes to the Fees 
Schedule do not change any fees charged for RLG, RLV, RUI or UKXM, 
historical Open-Close data, or within any of the tables in which the 
proposed rule change updates a rule reference to Cboe Options Rules, 
and thus, those fees will continue to be reasonable and equitable, and 
uniformly applied to all market participants. The Exchange believes the 
proposed rule changes remove impediments to and perfect the mechanism 
of a free and open market and national market system as they add 
clarity, mitigate any potential confusion in connection with the 
presentation of these fees or information in connection with these 
fees, and facilitate better understanding of the Fees Schedule for all 
market participants, which ultimately protects investors.

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. As indicated above, the 
proposed changes to the Fees Schedule do not change any of the current 
fees or the manner in which they currently apply to market 
participants. The proposed changes are not competitive in nature and 
are merely intended to clean up the Fees Schedule in order to provide 
additional clarity and facilitate better understanding of the Fees 
Schedule for all 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.

[[Page 14515]]

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

    Because the foregoing proposed rule change does not:
    A. Significantly affect the protection of investors or the public 
interest;
    B. impose any significant burden on competition; and
    C. become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \10\ and 
Rule 19b-4(f)(6) \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)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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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
exception occurred on : 2020-05025.htm
exception occurred on : 2020-05025.htm
     Send an email to rul[email protected]. Please include 
File Number SR-CBOE-2020-006 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-2020-006. 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. 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-2020-006 and should be 
submitted on or before April 2, 2020.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-05025 Filed 3-11-20; 8:45 am]
 BILLING CODE 8011-01-P