Document ID: SEC-2021-0811-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc.
Posted Date: 2021-06-07T04:00Z

[Federal Register Volume 86, Number 107 (Monday, June 7, 2021)]
[Notices]
[Pages 30342-30344]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11796]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92078; File No. SR-CBOE-2021-035]

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

June 1, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 21, 2021, Cboe Exchange, Inc. (``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.
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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 the Silexx trading platform (``Silexx'' or the ``platform'') 
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 purpose of this filing is to amend the Silexx Fees Schedule to 
amend the ``CAT File'' fee.\3\
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    \3\ The Exchange initially filed the proposed fee changes [sic] 
May 1, 2021 (SR-CBOE-2021-032). On May 12, 2021, the Exchange 
withdrew that filing and SR-CBOE-2021-033. On May 21, 2021, the 
Exchange withdrew that filing and submitting [sic] this filing.
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    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,\4\ 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. With the exception of Silexx 
FLEX and Cboe Silexx, users cannot directly route orders through any of 
the current versions of Silexx to an exchange or trading center nor is 
the platform integrated into, or directly connected to, Cboe Options' 
System. The Exchange has more recently made available additional 
versions of the Silexx platform, Silexx FLEX and Cboe Silexx, which do 
support the trading of FLEX and non-FLEX Options, respectively, and 
allows authorized Users with direct access to the Exchange. The Silexx 
front-end and back-end platforms are a software application that are 
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

[[Page 30343]]

a TPH to license the platform. Use of Silexx is completely optional.
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    \4\ The platform also permits users to submit orders for 
commodity futures, commodity options and other non-security products 
to be sent to designated contract markets, futures commission 
merchants, introducing brokers or other applicable destinations of 
the users' choice.
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    The Exchange recently adopted a fee for CAT Files.\5\ Particularly, 
Silexx makes Consolidated Audit Trail (``CAT'')-formatted files 
available to Silexx users for orders processed by the user via Silexx 
applications. Users may also elect to have Silexx, which is a CAT 
Reporter Agent, submit these files to CAT on their behalf. The Exchange 
assesses a monthly fee of $250 per CAT Industry Member ID 
(``IMID''),\6\ payable by the trading firm, for CAT Files. The Exchange 
however currently waives the CAT Files fee for Silexx FLEX and Cboe 
Silexx. The Exchange now wishes to eliminate the current CAT Files fee 
waiver and assess the monthly $250 fee to all Silexx users, including 
Silexx FLEX and Cboe Silexx users. The Exchange proposes to also 
provide that the CAT Files fee will be assessed per trading firm, 
instead of per IMID.
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    \5\ See Securities Exchange Release No. 89285 (July 10, 2020) 85 
FR 43284 (July 16, 2020) (SR-CBOE-2020-062).
    \6\ CAT uses the IMID to determine the firm for which data is 
submitted and to facilitate event linkages within a firm and between 
venues.
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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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    In particular, the Exchange believes eliminating the current CAT 
File fee waiver for Silexx FLEX and Cboe Silexx users is reasonable as 
the Exchange believes the CAT File fee is substantially lower than the 
cost assessed by third-party vendors for similar CAT files and is the 
same rate for other similar reports (i.e., Equity Order Reports). The 
Exchange notes it is not changing the amount of the CAT File fee, but 
rather eliminating the current waiver for Silexx FLEX and Cboe Silexx 
users. The Exchange believes the elimination of the waiver is 
reasonable, equitable and not unfairly discriminatory because all users 
who elect to receive CAT Files will now be subject to the same monthly 
fee. Additionally, the Exchange originally adopted the CAT Files fee 
waiver for Silexx FLEX and Cboe Silexx as such platforms at the time 
were still relatively new and the Exchange wished to incentivize their 
use to market participants.\10\ The Exchange notes that both platforms 
have now been available to market participants for over a year and 
therefore the Exchange no longer believes it's necessary to continue to 
provide market participants this particular incentive. The Exchange 
also believes it's reasonable, equitable and not unfairly 
discriminatory to assess the CAT File fee per trading firm instead of 
IMID. Particularly, the Exchange notes it's reasonable as trading firms 
with more than one IMID would be subject to less fees for CAT 
Files.\11\ Moreover, charging on a per trading firm basis is consistent 
with how the Exchange assesses fees for other similar reports (i.e., 
Equity Order Reports). Additionally, the proposed change applies to all 
users that elect to receive CAT Files. The proposal is equitable and 
not unfairly discriminatory as it applies to all users of Silexx FLEX 
and Cboe Silexx uniformly. Finally, the Exchange notes receipt of the 
CAT Files is completely voluntary and not compulsory. Indeed, all users 
of Silexx are able to extract the necessary data from Silexx to create 
a CAT report themselves to comply with their reporting obligations even 
if they choose not to purchase the optional CAT Files.
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    \10\ See Securities Exchange Release No. 89285 (July 10, 2020) 
85 FR 43284 (July 16, 2020) (SR-CBOE-2020-062).
    \11\ For example, if a trading firm has 2 IMIDs, that trading 
firm will only be assessed $250 per month, as proposed, as compared 
to $500 per month under the current methodology (2 x $250).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Cboe Options 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 believes that 
the proposed rule change will not impose any burden on intramarket 
competition because the proposed rule changes apply to all similarly 
situated users of Silexx uniformly. The Exchange notes that CAT Files 
are available to all Silexx users, and users have discretion to 
determine which, if any, types of reports to purchase.
    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 and to the ability to 
receive certain reports from an Exchange system. 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 \12\ and paragraph (f) of Rule 19b-4 \13\ 
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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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 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:

[[Page 30344]]

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-2021-035 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-2021-035. 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-2021-035 and should be submitted on 
or before June 28, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-11796 Filed 6-4-21; 8:45 am]
BILLING CODE 8011-01-P