Document ID: SEC-2021-1147-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Cboe Exchange, Inc.
Posted Date: 2021-08-26T04:00Z

[Federal Register Volume 86, Number 163 (Thursday, August 26, 2021)]
[Notices]
[Pages 47666-47668]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-18347]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-92712; File No. SR-CBOE-2021-049]

Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To Amend 
Its Fees Schedule With Respect to Its Strategy Fee Cap

August 20, 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 August 17, 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 
and II 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 with respect to its strategy fee cap. 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,

[[Page 47667]]

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 Footnote 13 of its Fees Schedule in 
relation to its strategy order fee cap, effective August 17, 2021.
    Footnote 13 provides that Market-Maker, Clearing Trading Permit 
Holder, JBO participant, broker-dealer and non-Trading Permit Holder 
market-maker transaction fees are capped at $0.00 for all merger, short 
stock interest, reversal, conversion and jelly roll strategies executed 
in open outcry on the same trading day in the same option class across 
all symbols in equities, ETFs and ETNs. Footnote 13 also provides that 
strategy orders must be marked with a code approved by the Exchange 
identifying the orders as eligible for fee cap, and that strategy 
orders executed during September 2020 will be eligible for the fee cap 
notwithstanding not being marked, provided that a TPH submits a rebate 
request with supporting documentation for such orders to the Exchange 
within 3 business days of September 30, 2020 (i.e., October 5, 2020). 
Beginning August 17, 2021, the Exchange's billing system will be able 
to automatically identify strategy orders for purposes of the strategy 
order fee cap, thereby eliminating the need for TPHs to manually mark 
their strategy orders with a code approved the Exchange. Accordingly, 
the Exchange proposes to update Footnote 13 by removing the language in 
connection with the marking requirements for strategy orders.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\3\ in general, and 
furthers the objectives of Section 6(b)(4),\4\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and issuers and other persons 
using its facilities. The Exchange also believes that the proposed rule 
change is consistent with the objectives of Section 6(b)(5) \5\ 
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, and, particularly, is not 
designed to permit unfair discrimination between customers, issuers, 
brokers, or dealers.
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    \3\ 15 U.S.C. 78f.
    \4\ 15 U.S.C. 78f(b)(4).
    \5\ 15 U.S.C. 78f.(b)(5).
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    In particular, the Exchange believes that removing language from 
its Fees Schedule in connection with manual marking requirements for 
strategy orders in order for TPHs to receive the fee cap is reasonable 
as the Exchange's billing system will now be able to automatically 
identify strategy orders for purposes of the strategy order fee cap. 
The proposed rule change makes no changes to the fee cap but merely 
eliminates the need for TPHs to mark orders to receive the fee cap. The 
proposed rule change is reasonable as it provides transparency in the 
Fees Schedule and alleviates potential investor confusion in connection 
with marking strategy orders as eligible to receive the fee cap, 
thereby removing impediments to and perfecting the mechanism of a free 
and open market and a national market system and protecting investors 
and the public interest. The Exchange also believes the proposed rule 
change is equitable and not unfairly discriminatory as it applies 
uniformly to all TPHs, in that, all strategy orders submitted will be 
automatically identified as eligible for the fee cap by the Exchange's 
billing system.

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. Specifically, the Exchange 
does not believe the proposed rule change will impose any burden on 
intramarket competition that is not necessary or appropriate as the 
proposed rule change applies uniformly to all TPHs, in that, all 
strategy orders submitted will be automatically identified as eligible 
for the fee cap by the Exchange's billing system. The proposed rule 
change makes no changes to the fee cap but merely eliminates the need 
for TPHs to mark orders to receive the fee cap. Further, the Exchange 
believes the proposed rule change will not cause an unnecessary burden 
on intermarket competition because it only applies to trading on Cboe 
Options. 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 is effective upon filing pursuant to 
Section 19(b)(3)(A) \6\ of the Act and subparagraph (f)(2) of Rule 19b-
4 \7\ thereunder, because it establishes a due, fee, or other charge 
imposed by the Exchange.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of such 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 under 
Section 19(b)(2)(B) \8\ of the Act to determine whether the proposed 
rule change should be approved or disapproved.
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    \8\ 15 U.S.C. 78s(b)(2)(B).
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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.

[[Page 47668]]

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-2021-049 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-2021-049. 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-2021-049 and should be submitted on 
or before September 16, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2021-18347 Filed 8-25-21; 8:45 am]
BILLING CODE 8011-01-P