82_FR_59235 82 FR 58996 - Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Transaction Fees for Exchange's Equity Trading Platform

82 FR 58996 - Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Transaction Fees for Exchange's Equity Trading Platform

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 239 (December 14, 2017)

Page Range58996-58998
FR Document2017-26911

Federal Register, Volume 82 Issue 239 (Thursday, December 14, 2017)
[Federal Register Volume 82, Number 239 (Thursday, December 14, 2017)]
[Notices]
[Pages 58996-58998]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-26911]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-82240; File No. SR-CboeEDGX-2017-003]


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

December 8, 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 EDGX Exchange, Inc. (``EDGX'' 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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[[Page 58997]]

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 EDGX 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 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: (i) Reduce the 
rebate applicable to fee code ZA; and (ii) provide the enhanced rebate 
offered by the Investor Depth Tier under footnote 1 of the fee schedule 
to orders that yield fee code ZA where the Member satisfies the tier's 
required criteria.
    Currently, the Exchange determines the liquidity adding rebate that 
it will provide to Members using the Exchange's fee code and tiered 
pricing structure. Fee code ZA is appended to Retail Orders \6\ that 
add liquidity on the Exchange. Retail Orders which yield fee code ZA 
currently receive a rebate of $0.0034 per share in securities priced at 
or above $1.00 and a rebate of $0.00003 per share in securities priced 
below $1.00. The Exchange now proposes to reduce the rebate provided by 
fee code ZA from $0.0034 per share to $0.0032 per share for securities 
priced at or above $1.00. The Exchange does not proposes to amend the 
rebate provided by fee code ZA for securities priced below $1.00.
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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 11.21(a)(2).
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    The Exchange offers additional rebates depending on the volume 
tiers for which such Member qualifies. As is the case with any rebate 
on the fee schedule, to the extent that a Member qualifies for higher 
rebates than those provided under a volume tier, the higher rebate 
shall apply. Footnote 1 offers volume tiered rebates ranging from 
$0.0025 to $0.0033 per share to orders yielding fee codes B,\7\ V, \8\ 
Y,\9\ 3 \10\ and 4.\11\ Under footnote 1's Investor Depth Tier, a 
Member will receive a rebate of $0.0033 per share where they: (i) add 
an ADV >= 0.12% of the TCV; (ii) have an ``added liquidity'' as a 
percentage of ``added plus removed liquidity'' >= 85%; and (iii) adds 
an ADV >= 400,000 shares as non-displayed orders that yield fee code 
HA,\12\ HI,\13\ and/or MM.\14\ The Exchange now proposes to also 
provide the rebate offered by the Investor Depth Tier to orders that 
yield fee code ZA where the Member satisfies the tier's required 
criteria. As such, Member's Retail Orders that yield fee code ZA would 
receive an enhanced rebate of $0.0033 per share where that Member 
satisfies the tier's required criteria.
---------------------------------------------------------------------------

    \7\ Fee code B is appended to displayed orders that add 
liquidity in Tape B securities and are provided a rebate of $0.0020 
per share. See the Exchange's fee schedule available at http://markets.cboe.com/us/equities/membership/fee_schedule/edgx/.
    \8\ Fee code V is appended to displayed orders that add 
liquidity in Tape A securities and are provided a rebate of $0.0020 
per share. Id.
    \9\ Fee code Y is appended to displayed orders that add 
liquidity in Tape C securities and are provided a rebate of $0.0020 
per share. Id.
    \10\ Fee code 3 is appended to displayed orders that add 
liquidity in Tape A or C securities during the post-market or pre-
market sessions and are provided a rebate of $0.0020 per share. Id.
    \11\ Fee code 4 is appended to displayed orders that add 
liquidity in Tape B securities during the post-market or pre-market 
sessions and are provided a rebate of $0.0020 per share. Id.
    \12\ Fee code HA is appended to non-displayed orders that add 
liquidity and are provided a rebate of $0.0015 per share. See the 
Exchange's fee schedule available at http://markets.cboe.com/us/equities/membership/fee_schedule/edgx/.
    \13\ Fee code HI is appended to non-displayed orders that add 
liquidity and receive price improvement and are executed free of 
charge. Id.
    \14\ Fee code MM is appended to non-displayed orders that add 
liquidity using the Mid-Point Peg order type. Id.
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Implementation Date
    The Exchange proposes to implement these amendments to its fee 
schedule as of December 1, 2017.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the objectives of Section 6 of the Act,\15\ in general, and 
furthers the objectives of Section 6(b)(4),\16\ 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 also notes that it operates in a highly-
competitive market in which market participants can readily direct 
order flow to competing venues if they deem fee levels at a particular 
venue to be excessive. The proposed rule change reflects a competitive 
pricing structure designed to incent market participants to direct 
their order flow to the Exchange. The Exchange believes the rates 
remain competitive with those charged by other venues and, therefore, 
reasonable and equitably allocated to Members. The Exchange further 
believes that the proposed amendments are non-discriminatory because 
they apply uniformly to all Members.
---------------------------------------------------------------------------

    \15\ 15 U.S.C. 78f.
    \16\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Exchange believes it is equitable and reasonable to lower the 
rebate for Retail Orders that yield fee code ZA from $0.0034 to $0.0032 
per share as the level of rebate is either equal to or greater than the 
rebate offered on another exchange.\17\ The Exchange further believes 
the proposed fee change is equitable and reasonable because it 
continues to enable Retail Orders that add liquidity to receive an 
enhanced rebate by qualifying for the Investor Depth Tier under 
footnote 1. Doing so should encourage market participants to direct 
more order flow to the Exchange in attempt to qualify for the Investor 
Depth tier and receive an enhanced rebate for their Retail Orders. 
Volume-based rebates and fees such as proposed herein have been widely 
adopted by equities and options exchanges and are equitable because 
they are open to all Members on an equal basis and provide additional 
benefits or discounts that are reasonably related to the value to an 
exchange's market quality associated with higher levels of market 
activity, such as higher levels of liquidity provision and/or growth 
patterns, and introduction of higher volumes of orders

[[Page 58998]]

into the price and volume discovery processes.
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    \17\ 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. Cboe BZX 
Exchange, Inc. (``BZX'') provides a rebate of $0.0032 per share to 
retail orders that add liquidity. See the BZX fee schedule available 
at http://markets.cboe.com/us/equities/membership/fee_schedule/bzx/.
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(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 not necessary or appropriate in 
furtherance of the purposes of the Act. Similarly, the Exchange does 
not believe that the proposed change to the Exchange's tiered pricing 
structure burdens competition, but instead, enhances competition by 
modifying pricing incentives to attract order flow and incentivize 
participants to increase their participation on the Exchange. The 
Exchange notes that it operates in a highly competitive market in which 
market participants can readily direct order flow to competing venues 
if they deem fee structures to be unreasonable or excessive. The 
Exchange does not believe the proposed amendments would burden 
intramarket competition as they would be available to all Members 
uniformly.

(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 \18\ and paragraph (f) of Rule 19b-4 
thereunder.\19\ 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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    \18\ 15 U.S.C. 78s(b)(3)(A).
    \19\ 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-CboeEDGX-2017-003 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-CboeEDGX-2017-003. 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-CboeEDGX-2017-003 and should be 
submitted on or before January 4, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\20\
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    \20\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-26911 Filed 12-13-17; 8:45 am]
 BILLING CODE 8011-01-P



                                                58996                     Federal Register / Vol. 82, No. 239 / Thursday, December 14, 2017 / Notices

                                                Burden on Competition and Barriers to                     (a) Whether any of the national                     filing also will be available for
                                                Entry                                                   securities exchanges or FINRA are                     inspection and copying at the principal
                                                                                                        disadvantaged by the fees; and                        office of the Exchange. All comments
                                                   (12) Commenters’ views as to whether                   (b) If so, whether any such
                                                the allocation of 75% of CAT costs to                                                                         received will be posted without change.
                                                                                                        disadvantages would be of a magnitude                 Persons submitting comments are
                                                Industry Members (other than Execution                  that would alter the competitive
                                                Venue ATSs) imposes any burdens on                                                                            cautioned that we do not redact or edit
                                                                                                        landscape.                                            personal identifying information from
                                                competition to Industry Members,                          (21) Commenters’ views on any
                                                including views on what baseline                                                                              comment submissions. You should
                                                                                                        potential burden imposed by the fees on
                                                competitive landscape the Commission                                                                          submit only information that you wish
                                                                                                        competitive quoting and other liquidity
                                                should consider when analyzing the                                                                            to make available publicly. All
                                                                                                        provision in the market, including,
                                                proposed allocation of CAT costs.                       specifically:                                         submissions should refer to File
                                                   (13) Commenters’ views on the                          (a) Commenters’ views on the kinds of               Number SR–NYSEARCA–2017–52 and
                                                burdens on competition, including the                   disincentives that discourage liquidity               should be submitted on or before
                                                relevant markets and services and the                   provision and/or disincentives that the               January 4, 2018.
                                                impact of such burdens on the baseline                  Commission should consider in its                       For the Commission, by the Division of
                                                competitive landscape in those relevant                 analysis;                                             Trading and Markets, pursuant to delegated
                                                markets and services.                                     (b) Commenters’ views as to whether                 authority.101
                                                   (14) Commenters’ views on any                        the fees could disincentivize the                     Robert W. Errett,
                                                potential burdens imposed by the fees                   provision of liquidity; and
                                                                                                          (c) Commenters’ views as to whether                 Deputy Secretary.
                                                on competition between and among
                                                CAT Reporters, including views on                       the fees limit any disincentives to                   [FR Doc. 2017–27024 Filed 12–13–17; 8:45 am]
                                                which baseline markets and services the                 provide liquidity.                                    BILLING CODE 8011–01–P
                                                fees could have competitive effects on                    (22) Commenters’ views as to whether
                                                and whether the fees are designed to                    the amendment adequately responds to
                                                minimize such effects.                                  and/or addresses comments received on                 SECURITIES AND EXCHANGE
                                                   (15) Commenters’ general views on                    related filings.                                      COMMISSION
                                                the impact of the proposed fees on                      Electronic Comments
                                                economies of scale and barriers to entry.                                                                     [Release No. 34–82240; File No. SR–
                                                   (16) Commenters’ views on the                           • Use the Commission’s internet                    CboeEDGX–2017–003]
                                                baseline economies of scale and barriers                comment form (http://www.sec.gov/
                                                to entry for Industry Members and                       rules/sro.shtml); or                                  Self-Regulatory Organizations; Cboe
                                                                                                           • Send an email to rule-comments@                  EDGX Exchange, Inc.; Notice of Filing
                                                Execution Venues and the relevant
                                                                                                        sec.gov. Please include File Number SR–               and Immediate Effectiveness of a
                                                markets and services over which these
                                                                                                        NYSEARCA–2017–52 on the subject                       Proposed Rule Change Related to
                                                economies of scale and barriers to entry
                                                                                                        line.
                                                exist.                                                                                                        Transaction Fees for Exchange’s
                                                   (17) Commenters’ views as to whether                 Paper Comments                                        Equity Trading Platform
                                                a tiered fee structure necessarily results                 • Send paper comments in triplicate                December 8, 2017.
                                                in less active tiers paying more per unit               to Brent J. Fields, Secretary, Securities
                                                than those in more active tiers, thus                   and Exchange Commission, 100 F Street                    Pursuant to Section 19(b)(1) of the
                                                creating economies of scale, with                       NE, Washington, DC 20549–1090.                        Securities Exchange Act of 1934
                                                supporting information if possible.                     All submissions should refer to File                  (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                                   (18) Commenters’ views as to how the                 Number SR–NYSEARCA–2017–52. This                      notice is hereby given that on November
                                                level of the fees for the least active tiers            file number should be included on the                 30, 2017, Cboe EDGX Exchange, Inc.
                                                would or would not affect barriers to                   subject line if email is used. To help the            (‘‘EDGX’’ or ‘‘Exchange’’) filed with the
                                                entry.                                                  Commission process and review your                    Securities and Exchange Commission
                                                   (19) Commenters’ views on whether                    comments more efficiently, please use                 (‘‘Commission’’) the proposed rule
                                                the difference between the cost per unit                only one method. The Commission will                  change as described in Items I, II and III
                                                (messages or market share) in less active               post all comments on the Commission’s                 below, which Items have been prepared
                                                tiers compared to the cost per unit in                  internet website (http://www.sec.gov/                 by the Exchange. The Exchange has
                                                more active tiers creates regulatory                    rules/sro.shtml). Copies of the                       designated the proposed rule change as
                                                economies of scale that favor larger                    submission, all subsequent                            one establishing or changing a member
                                                competitors and, if so:                                 amendments, all written statements                    due, fee, or other charge imposed by the
                                                   (a) How those economies of scale                     with respect to the proposed rule                     Exchange under Section 19(b)(3)(A)(ii)
                                                compare to operational economies of                     change that are filed with the                        of the Act 3 and Rule 19b–4(f)(2)
                                                scale; and                                              Commission, and all written                           thereunder,4 which renders the
                                                   (b) Whether those economies of scale                 communications relating to the                        proposed rule change effective upon
                                                reduce or increase the current                          proposed rule change between the                      filing with the Commission. The
                                                advantages enjoyed by larger                            Commission and any person, other than                 Commission is publishing this notice to
                                                competitors or otherwise alter the                      those that may be withheld from the
                                                                                                                                                              solicit comments on the proposed rule
                                                competitive landscape.                                  public in accordance with the
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                                                                                                                                                              change from interested persons.
                                                   (20) Commenters’ views on whether                    provisions of 5 U.S.C. 552, will be
                                                the fees could affect competition                       available for website viewing and
                                                between and among national securities                   printing in the Commission’s Public                     101 17CFR 200.30–3(a)(12).
                                                exchanges and FINRA, in light of the                    Reference Room, 100 F Street NE,                        1 15 U.S.C. 78s(b)(1).
                                                fact that implementation of the fees does               Washington, DC 20549 on official                        2 17 CFR 240.19b–4.

                                                not require the unanimous consent of all                business days between the hours of                      3 15 U.S.C. 78s(b)(3)(A)(ii).

                                                such entities, and, specifically:                       10:00 a.m. and 3:00 p.m. Copies of the                  4 17 CFR 240.19b–4(f)(2).




                                           VerDate Sep<11>2014   21:28 Dec 13, 2017   Jkt 244001   PO 00000   Frm 00205   Fmt 4703   Sfmt 4703   E:\FR\FM\14DEN1.SGM     14DEN1


                                                                          Federal Register / Vol. 82, No. 239 / Thursday, December 14, 2017 / Notices                                                       58997

                                                I. Self-Regulatory Organization’s                       reduce the rebate provided by fee code                  2. Statutory Basis
                                                Statement of the Terms of Substance of                  ZA from $0.0034 per share to $0.0032                       The Exchange believes that the
                                                the Proposed Rule Change                                per share for securities priced at or                   proposed rule change is consistent with
                                                   The Exchange filed a proposal to                     above $1.00. The Exchange does not                      the objectives of Section 6 of the Act,15
                                                amend the fee schedule applicable to                    proposes to amend the rebate provided                   in general, and furthers the objectives of
                                                Members 5 and non-Members of the                        by fee code ZA for securities priced                    Section 6(b)(4),16 in particular, as it is
                                                Exchange pursuant to EDGX Rules                         below $1.00.                                            designed to provide for the equitable
                                                15.1(a) and (c).                                           The Exchange offers additional                       allocation of reasonable dues, fees and
                                                   The text of the proposed rule change                 rebates depending on the volume tiers                   other charges among its Members and
                                                is available at the Exchange’s website at               for which such Member qualifies. As is                  other persons using its facilities. The
                                                www.markets.cboe.com, at the principal                  the case with any rebate on the fee                     Exchange also notes that it operates in
                                                office of the Exchange, and at the                      schedule, to the extent that a Member                   a highly-competitive market in which
                                                Commission’s Public Reference Room.                     qualifies for higher rebates than those                 market participants can readily direct
                                                                                                        provided under a volume tier, the                       order flow to competing venues if they
                                                II. Self-Regulatory Organization’s                      higher rebate shall apply. Footnote 1                   deem fee levels at a particular venue to
                                                Statement of the Purpose of, and                        offers volume tiered rebates ranging                    be excessive. The proposed rule change
                                                Statutory Basis for, the Proposed Rule                  from $0.0025 to $0.0033 per share to                    reflects a competitive pricing structure
                                                Change                                                  orders yielding fee codes B,7 V, 8 Y,9 3 10             designed to incent market participants
                                                  In its filing with the Commission, the                and 4.11 Under footnote 1’s Investor                    to direct their order flow to the
                                                Exchange included statements                            Depth Tier, a Member will receive a                     Exchange. The Exchange believes the
                                                concerning the purpose of and basis for                 rebate of $0.0033 per share where they:                 rates remain competitive with those
                                                the proposed rule change and discussed                  (i) add an ADV ≥ 0.12% of the TCV; (ii)                 charged by other venues and, therefore,
                                                any comments it received on the                         have an ‘‘added liquidity’’ as a                        reasonable and equitably allocated to
                                                proposed rule change. The text of these                 percentage of ‘‘added plus removed                      Members. The Exchange further believes
                                                statements may be examined at the                       liquidity’’ ≥ 85%; and (iii) adds an ADV                that the proposed amendments are non-
                                                places specified in Item IV below. The                  ≥ 400,000 shares as non-displayed                       discriminatory because they apply
                                                Exchange has prepared summaries, set                    orders that yield fee code HA,12 HI,13                  uniformly to all Members.
                                                forth in Sections A, B, and C below, of                 and/or MM.14 The Exchange now                              The Exchange believes it is equitable
                                                the most significant parts of such                      proposes to also provide the rebate                     and reasonable to lower the rebate for
                                                statements.                                             offered by the Investor Depth Tier to                   Retail Orders that yield fee code ZA
                                                                                                        orders that yield fee code ZA where the                 from $0.0034 to $0.0032 per share as the
                                                (A) Self-Regulatory Organization’s                      Member satisfies the tier’s required                    level of rebate is either equal to or
                                                Statement of the Purpose of, and                        criteria. As such, Member’s Retail                      greater than the rebate offered on
                                                Statutory Basis for, the Proposed Rule                  Orders that yield fee code ZA would                     another exchange.17 The Exchange
                                                Change                                                  receive an enhanced rebate of $0.0033                   further believes the proposed fee change
                                                1. Purpose                                              per share where that Member satisfies                   is equitable and reasonable because it
                                                   The Exchange proposes to amend its                   the tier’s required criteria.                           continues to enable Retail Orders that
                                                fee schedule to: (i) Reduce the rebate                  Implementation Date                                     add liquidity to receive an enhanced
                                                applicable to fee code ZA; and (ii)                                                                             rebate by qualifying for the Investor
                                                provide the enhanced rebate offered by                    The Exchange proposes to implement                    Depth Tier under footnote 1. Doing so
                                                the Investor Depth Tier under footnote                  these amendments to its fee schedule as                 should encourage market participants to
                                                1 of the fee schedule to orders that yield              of December 1, 2017.                                    direct more order flow to the Exchange
                                                fee code ZA where the Member satisfies                                                                          in attempt to qualify for the Investor
                                                the tier’s required criteria.
                                                                                                           7 Fee code B is appended to displayed orders that    Depth tier and receive an enhanced
                                                                                                        add liquidity in Tape B securities and are provided     rebate for their Retail Orders. Volume-
                                                   Currently, the Exchange determines                   a rebate of $0.0020 per share. See the Exchange’s
                                                the liquidity adding rebate that it will                fee schedule available at http://markets.cboe.com/
                                                                                                                                                                based rebates and fees such as proposed
                                                provide to Members using the                            us/equities/membership/fee_schedule/edgx/.              herein have been widely adopted by
                                                Exchange’s fee code and tiered pricing                     8 Fee code V is appended to displayed orders that    equities and options exchanges and are
                                                structure. Fee code ZA is appended to                   add liquidity in Tape A securities and are provided     equitable because they are open to all
                                                                                                        a rebate of $0.0020 per share. Id.                      Members on an equal basis and provide
                                                Retail Orders 6 that add liquidity on the                  9 Fee code Y is appended to displayed orders that
                                                Exchange. Retail Orders which yield fee                 add liquidity in Tape C securities and are provided
                                                                                                                                                                additional benefits or discounts that are
                                                code ZA currently receive a rebate of                   a rebate of $0.0020 per share. Id.                      reasonably related to the value to an
                                                $0.0034 per share in securities priced at                  10 Fee code 3 is appended to displayed orders that   exchange’s market quality associated
                                                or above $1.00 and a rebate of $0.00003                 add liquidity in Tape A or C securities during the      with higher levels of market activity,
                                                                                                        post-market or pre-market sessions and are              such as higher levels of liquidity
                                                per share in securities priced below                    provided a rebate of $0.0020 per share. Id.
                                                $1.00. The Exchange now proposes to                        11 Fee code 4 is appended to displayed orders that
                                                                                                                                                                provision and/or growth patterns, and
                                                                                                        add liquidity in Tape B securities during the post-     introduction of higher volumes of orders
                                                   5 The term ‘‘Member’’ is defined as ‘‘any            market or pre-market sessions and are provided a
                                                registered broker or dealer that has been admitted      rebate of $0.0020 per share. Id.                          15 15 U.S.C. 78f.
                                                                                                           12 Fee code HA is appended to non-displayed
                                                to membership in the Exchange.’’ See Exchange                                                                     16 15 U.S.C. 78f(b)(4).
                                                Rule 1.5(n).                                            orders that add liquidity and are provided a rebate       17 NYSE Arca, Inc. (‘‘NYSE Arca’’) provides a
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                                                   6 ‘‘Retail Orders’’ are defined as ‘‘an agency or    of $0.0015 per share. See the Exchange’s fee            standard rebate of $0.0030 per share for retail orders
                                                riskless principal order that meets the criteria of     schedule available at http://markets.cboe.com/us/       that add liquidity. See the NYSE Arca fee schedule
                                                FINRA Rule 5320.03 that originates from a natural       equities/membership/fee_schedule/edgx/.                 available at https://www.nyse.com/publicdocs/
                                                                                                           13 Fee code HI is appended to non-displayed
                                                person and is submitted to the Exchange by a Retail                                                             nyse/markets/nyse-arca/NYSE_Arca_Marketplace_
                                                Member Organization, provided that no change is         orders that add liquidity and receive price             Fees.pdf. Cboe BZX Exchange, Inc. (‘‘BZX’’)
                                                made to the terms of the order with respect to price    improvement and are executed free of charge. Id.        provides a rebate of $0.0032 per share to retail
                                                or side of market and the order does not originate         14 Fee code MM is appended to non-displayed          orders that add liquidity. See the BZX fee schedule
                                                from a trading algorithm or any other computerized      orders that add liquidity using the Mid-Point Peg       available at http://markets.cboe.com/us/equities/
                                                methodology.’’ See Exchange Rule 11.21(a)(2).           order type. Id.                                         membership/fee_schedule/bzx/.



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                                                58998                      Federal Register / Vol. 82, No. 239 / Thursday, December 14, 2017 / Notices

                                                into the price and volume discovery                     Electronic Comments                                    SECURITIES AND EXCHANGE
                                                processes.                                                                                                     COMMISSION
                                                                                                           • Use the Commission’s internet
                                                (B) Self-Regulatory Organization’s                      comment form (http://www.sec.gov/                      [Release No. 34–82248; File No. SR–CFE–
                                                Statement on Burden on Competition                      rules/sro.shtml); or                                   2017–003]

                                                   The Exchange does not believe that                      • Send an email to rule-comments@                   Self-Regulatory Organizations; Cboe
                                                the proposed rule change will impose                    sec.gov. Please include File Number SR–                Futures Exchange, LLC; Notice of
                                                any burden on competition not                           CboeEDGX–2017–003 on the subject                       Filing of Proposed Rule Change
                                                necessary or appropriate in furtherance                 line.                                                  Regarding CFE’s New Trading System
                                                of the purposes of the Act. Similarly, the
                                                                                                        Paper Comments                                         December 8, 2017.
                                                Exchange does not believe that the
                                                                                                                                                                  Pursuant to Section 19(b)(7) of the
                                                proposed change to the Exchange’s                         • Send paper comments in triplicate                  Securities Exchange Act of 1934
                                                tiered pricing structure burdens                        to Brent J. Fields, Secretary, Securities              (‘‘Act’’),1 notice is hereby given that on
                                                competition, but instead, enhances                      and Exchange Commission, 100 F Street                  November 29, 2017 Cboe Futures
                                                competition by modifying pricing                        NE, Washington, DC 20549–1090.                         Exchange, LLC (‘‘CFE’’ or ‘‘Exchange’’)
                                                incentives to attract order flow and
                                                                                                        All submissions should refer to File                   filed with the Securities and Exchange
                                                incentivize participants to increase their
                                                                                                        Number SR–CboeEDGX–2017–003. This                      Commission (‘‘Commission’’) the
                                                participation on the Exchange. The
                                                                                                        file number should be included on the                  proposed rule change described in Items
                                                Exchange notes that it operates in a
                                                                                                        subject line if email is used. To help the             I and II below, which Items have been
                                                highly competitive market in which
                                                                                                                                                               prepared by CFE. The Commission is
                                                market participants can readily direct                  Commission process and review your
                                                                                                                                                               publishing this notice to solicit
                                                order flow to competing venues if they                  comments more efficiently, please use
                                                                                                                                                               comments on the proposed rule change
                                                deem fee structures to be unreasonable                  only one method. The Commission will
                                                                                                                                                               from interested persons. CFE also has
                                                or excessive. The Exchange does not                     post all comments on the Commission’s                  filed this proposed rule change with the
                                                believe the proposed amendments                         internet website (http://www.sec.gov/                  Commodity Futures Trading
                                                would burden intramarket competition                    rules/sro.shtml). Copies of the                        Commission (‘‘CFTC’’). CFE filed a
                                                as they would be available to all                       submission, all subsequent                             written certification with the CFTC
                                                Members uniformly.                                      amendments, all written statements                     under Section 5c(c) of the Commodity
                                                (C) Self-Regulatory Organization’s                      with respect to the proposed rule                      Exchange Act (‘‘CEA’’) 2 on November
                                                Statement on Comments on the                            change that are filed with the                         29, 2017.
                                                Proposed Rule Change Received From                      Commission, and all written
                                                                                                        communications relating to the                         I. Self-Regulatory Organization’s
                                                Members, Participants or Others                                                                                Description of the Proposed Rule
                                                                                                        proposed rule change between the
                                                  The Exchange has not solicited, and                   Commission and any person, other than                  Change
                                                does not intend to solicit, comments on                 those that may be withheld from the                       The Exchange proposes to amend its
                                                this proposed rule change. The                          public in accordance with the                          rules in connection with the
                                                Exchange has not received any                           provisions of 5 U.S.C. 552, will be                    implementation of a new CFE trading
                                                unsolicited written comments from                       available for website viewing and                      system. The scope of this filing is
                                                Members or other interested parties.                    printing in the Commission’s Public                    limited solely to the application of the
                                                                                                        Reference Room, 100 F Street NE,                       rule amendments to security futures
                                                III. Date of Effectiveness of the                                                                              traded on CFE. The only security futures
                                                Proposed Rule Change and Timing for                     Washington, DC 20549, on official
                                                                                                        business days between the hours of                     that have been offered for trading on
                                                Commission Action                                                                                              CFE were traded under Chapter 16 of
                                                                                                        10:00 a.m. and 3:00 p.m. Copies of the
                                                   The foregoing rule change has become                 filing also will be available for                      CFE’s Rulebook, which is applicable to
                                                effective pursuant to Section 19(b)(3)(A)               inspection and copying at the principal                Individual Stock Based and Exchange-
                                                of the Act 18 and paragraph (f) of Rule                 office of the Exchange. All comments                   Traded Fund Based Volatility Index
                                                19b–4 thereunder.19 At any time within                  received will be posted without change.                security futures. CFE does not currently
                                                60 days of the filing of the proposed rule              Persons submitting comments are                        list any security futures for trading. The
                                                change, the Commission summarily may                    cautioned that we do not redact or edit                text of the proposed rule change is
                                                temporarily suspend such rule change if                 personal identifying information from                  attached as Exhibit 4 to the filing but is
                                                it appears to the Commission that such                  comment submissions. You should                        not attached to the publication of this
                                                action is necessary or appropriate in the                                                                      notice.
                                                                                                        submit only information that you wish
                                                public interest, for the protection of                  to make available publicly. All                        II. Self-Regulatory Organization’s
                                                investors, or otherwise in furtherance of               submissions should refer to File                       Statement of the Purpose of, and
                                                the purposes of the Act.                                Number SR–CboeEDGX–2017–003 and                        Statutory Basis for, the Proposed Rule
                                                                                                        should be submitted on or before                       Change
                                                IV. Solicitation of Comments
                                                                                                        January 4, 2018.                                          In its filing with the Commission, CFE
                                                  Interested persons are invited to                       For the Commission, by the Division of               included statements concerning the
                                                submit written data, views, and                         Trading and Markets, pursuant to delegated             purpose of and basis for the proposed
                                                arguments concerning the foregoing,
sradovich on DSK3GMQ082PROD with NOTICES




                                                                                                        authority.20                                           rule change and discussed any
                                                including whether the proposed rule                     Eduardo A. Aleman,                                     comments it received on the proposed
                                                change is consistent with the Act.                                                                             rule change. The text of these statements
                                                Comments may be submitted by any of                     Assistant Secretary.
                                                                                                                                                               may be examined at the places specified
                                                the following methods:                                  [FR Doc. 2017–26911 Filed 12–13–17; 8:45 am]
                                                                                                                                                               in Item IV below. CFE has prepared
                                                                                                        BILLING CODE 8011–01–P
                                                  18 15 U.S.C. 78s(b)(3)(A).                                                                                     1 15  U.S.C. 78s(b)(7).
                                                  19 17 CFR 240.19b–4(f).                                 20 17   CFR 200.30–3(a)(12).                           27   U.S.C. 7a–2(c).



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Document Created: 2018-10-25 10:51:30
Document Modified: 2018-10-25 10:51:30
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
FR Citation82 FR 58996 

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