82 FR 58671 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Transaction Fees for the Exchange's Equity Platform

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 238 (December 13, 2017)

[Federal Register Volume 82, Number 238 (Wednesday, December 13, 2017)]
[Notices]
[Pages 58671-58673]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-26823]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82236; File No. SR-CboeBZX-2017-009]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Transaction Fees for the Exchange's Equity Platform

December 7, 2017.
    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 November 30, 2017, Cboe BZX Exchange, Inc. (``BZX'' or ``Exchange'') 
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 Exchange has designated 
the proposed rule change as one establishing or changing a member due, 
fee, or other charge imposed by the Exchange under Section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ 
which renders the proposed rule change effective upon filing with the 
Commission. 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to amend the fee schedule applicable 
to Members \5\ and non-Members of the Exchange pursuant to BZX Rules 
15.1(a) and (c).
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    \5\ The term ``Member'' is defined as ``any registered broker or 
dealer that has been admitted to membership in the Exchange.'' See 
Exchange Rule 1.5(n).
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    The text of the proposed rule change is available at the Exchange's 
website at www.markets.cboe.com, at the principal office of the 
Exchange, 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

[[Page 58672]]

places specified in Item IV below. The Exchange has prepared summaries, 
set forth in Sections A, B, and C below, of the most significant parts 
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 fee schedule to delete the 
Retail Order Tier under footnote 11. Fee code ZA is appended to Retail 
Orders that add liquidity on the Exchange. Retail Orders which yield 
fee code ZA currently receive a rebate of $0.0032 per share in 
securities priced at or above $1.00 and are charged no fee in 
securities priced below $1.00. Currently, under the Retail Order Tier, 
a Retail Order \6\ that yields fee code ZA will receive an enhanced 
rebate of $0.0034 per share where that Member adds Retail Orders that 
average at least 0.07% of TCV.\7\ Going forward, Members would receive 
the same rebate of $0.0032 per share for all of their Retail Orders 
that yield fee code ZA.\8\ The Exchange proposes to implement this 
amendment to its fee schedule on December 1, 2017.
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    \6\ ``Retail Orders'' are defined as ``an agency or riskless 
principal order that meets the criteria of FINRA Rule 5320.03 that 
originates from a natural person and is submitted to the Exchange by 
a Retail Member Organization, provided that no change is made to the 
terms of the order with respect to price or side of market and the 
order does not originate from a trading algorithm or any other 
computerized methodology.'' See Exchange Rule 11.25(a)(2).
    \7\ ``TCV'' means total consolidated volume calculated as the 
volume reported by all exchanges and trade reporting facilities to a 
consolidated transaction reporting plan for the month for which the 
fees apply. Id.
    \8\ The Exchange also proposes to delete reference to footnote 
11 from fee code ZA.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(4),\10\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. The Exchange believes eliminating the Retail Order Tier is 
equitable and reasonable because Retail Orders that yield fee code ZA 
may continue to receive an enhanced rebate of $0.0032 per share. The 
Exchange believes the rebate provided by fee code ZA will continue to 
encourage the entry of Retail Orders on the Exchange as no required 
added volume criteria is necessary to achieve the rebate. The Exchange 
also notes that the rebate for Retail Orders that yield fee code ZA 
remains greater than the rebate offered on another exchange.\11\ 
Lastly, the Exchange believes that the proposed amendment is non-
discriminatory because it applies uniformly to all Members.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(4).
    \11\ NYSE Arca, Inc. (``NYSE Arca'') provides a standard rebate 
of $0.0030 per share for retail orders that add liquidity. See the 
NYSE Arca fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\12\ in general, and 
furthers the objectives of Section 6(b)(4),\13\ in particular, as it is 
designed to provide for the equitable allocation of reasonable dues, 
fees and other charges among its Members and other persons using its 
facilities. The Exchange believes eliminating the Retail Order Tier is 
equitable and reasonable because Retail Orders that yield fee code ZA 
may continue to receive an enhanced rebate of $0.0032 per share. The 
Exchange believes the rebate provided by fee code ZA will continue to 
encourage the entry of Retail Orders on the Exchange as no required 
added volume criteria is necessary to achieve the rebate. The Exchange 
also notes that the rebate for Retail Orders that yield fee code ZA 
remains greater than the rebate offered on another exchange.\14\ 
Lastly, the Exchange believes that the proposed amendment is non-
discriminatory because it applies uniformly to all Members.
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    \12\ 15 U.S.C. 78f.
    \13\ 15 U.S.C. 78f(b)(4).
    \14\ NYSE Arca, Inc. (``NYSE Arca'') provides a standard rebate 
of $0.0030 per share for retail orders that add liquidity. See the 
NYSE Arca fee schedule available at https://www.nyse.com/publicdocs/nyse/markets/nyse-arca/NYSE_Arca_Marketplace_Fees.pdf.
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(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    The Exchange has not solicited, and does not intend to solicit, 
comments on this proposed rule change. The Exchange has not received 
any unsolicited written comments from Members or other interested 
parties.

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 \15\ and paragraph (f) of Rule 19b-4 
thereunder.\16\ 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.
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    \15\ 15 U.S.C. 78s(b)(3)(A).
    \16\ 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 [email protected]. Please include 
File Number SR-CboeBZX-2017-009 on the subject line.

Paper Comments

     Send paper comments in triplicate to Brent J. Fields, 
Secretary, Securities and Exchange Commission, 100 F Street NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CboeBZX-2017-009. 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

[[Page 58673]]

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-CboeBZX-2017-009 and should 
be submitted on or before January 3, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-26823 Filed 12-12-17; 8:45 am]
 BILLING CODE 8011-01-P