83 FR 32168 - Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on the Exchange's Equity Options Platform
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 133 (July 11, 2018)
Federal Register Volume 83, Issue 133 (July 11, 2018)
| Page Range | 32168-32170 | |
| FR Document | 2018-14848 |
[Federal Register Volume 83, Number 133 (Wednesday, July 11, 2018)] [Notices] [Pages 32168-32170] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-14848] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-83599; File No. SR-CboeEDGX-2018-022] Self-Regulatory Organizations; Cboe EDGX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use on the Exchange's Equity Options Platform July 6, 2018. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the [[Page 32169]] ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on June 29, 2018, Cboe EDGX Exchange, Inc. (the ``Exchange'' or ``EDGX'') 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. --------------------------------------------------------------------------- \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). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange filed a proposed rule change to modify its fee schedule with respect to Market Maker Fees. 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 for its equity options platform (``EDGX Options'') to eliminate Customer Volume Tier 4, effective July 2, 2018. By way of background, fee codes PC and NC are currently appended to all Customer orders in Penny Pilot Securities and Non-Penny Pilot Securities, respectively, and result in a standard rebate of $0.01 per contract. The Customer Volume Tiers in footnote 1 consist of five separate tiers, each providing an enhanced rebate to a Member's Customer orders that yield fee codes PC or NC upon satisfying monthly volume criteria required by the respective tier. Customer Volume Tier 4 in particular currently provides Members a rebate of $0.16 per contract where a Member (i) has an ADV \5\ in Customer orders greater than or equal to 0.15% of average OCV \6\ and (ii) has an ADV in Customer or Market Maker orders greater than or equal to 0.50% of average OCV. The Exchange no longer wishes to maintain this tier level. As such, the Exchange proposes to eliminate Customer Volume Tier 4 from the Fee Schedule and renumber the subsequent Volume Tier accordingly. --------------------------------------------------------------------------- \5\ ``ADV'' means average daily volume calculated as the number of contracts added or removed, combined, per day. ADV is calculated on a monthly basis. See EDGX Options Exchange Fee Schedule. \6\ ``OCV'' means the total equity and ETF options volume that clears in the Customer range at the Options Clearing Corporation (``OCC'') for the month for which the fees apply, excluding volume on any day that the Exchange experiences an Exchange System Disruption and on any day with a scheduled early market close See EDGX Options Exchange Fee Schedule. --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder that are applicable to a national securities exchange, and, in particular, with the requirements of Section 6 of the Act.\7\ Specifically, the Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,\8\ in that it provides for the equitable allocation of reasonable dues, fees and other charges among members and other persons using any facility or system which the Exchange operates or controls. --------------------------------------------------------------------------- \7\ 15 U.S.C. 78f. \8\ 15 U.S.C. 78f(b)(4). --------------------------------------------------------------------------- The Exchange believes that the proposal to eliminate Customer Volume Tier 4 is reasonable, fair, and equitable because the current tier is not providing the desired result of incentivizing Members to increase their participation in EDGX Options. Therefore, eliminating the tier will have a negligible effect on order flow and market behavior. The Exchange believes the proposed change is not unfairly discriminatory because it will apply equally to all Members. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange believes the proposed amendments to its fee schedule would not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. The Exchange does not believe that the proposed changes represent a significant departure from previous pricing offered by the Exchange or pricing offered by the Exchange's competitors. Members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed change will impair the ability of Members or competing venues to maintain their competitive standing in the financial markets. 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 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 \9\ and paragraph (f) of Rule 19b-4 \10\ 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. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78s(b)(3)(A). \10\ 17 CFR 240.19b-4(f). --------------------------------------------------------------------------- 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 CommentsUse the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or [[Page 32170]] Send an email to rule-comments@sec.gov. Please include File Number SR-CboeEDGX-2018-022 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-CboeEDGX-2018-022. 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-2018-022 and should be submitted on or before August 1, 2018. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\11\ --------------------------------------------------------------------------- \11\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Eduardo A. Aleman, Assistant Secretary. [FR Doc. 2018-14848 Filed 7-10-18; 8:45 am] BILLING CODE 8011-01-P
![32168 Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices
promoter of a Fund, or of the Distributor section 22(e) in order to allow such policies of the Fund of Funds and will
will compile, create, sponsor or Funds to pay redemption proceeds be based on the NAVs of the Funds.
maintain the Underlying Index.2 within fifteen calendar days following 9. Applicants also request relief to
3. Shares will be purchased and the tender of Creation Units for permit a Feeder Fund to acquire shares
redeemed in Creation Units and redemption. Applicants assert that the of another registered investment
generally on an in-kind basis. Except requested relief would not be company managed by the Adviser
where the purchase or redemption will inconsistent with the spirit and intent of having substantially the same
include cash under the limited section 22(e) to prevent unreasonable, investment objectives as the Feeder
circumstances specified in the undisclosed or unforeseen delays in the Fund (‘‘Master Fund’’) beyond the
Application, purchasers will be required actual payment of redemption proceeds. limitations in section 12(d)(1)(A) and
to purchase Creation Units by permit the Master Fund, and any
7. Applicants request an exemption to
depositing specified instruments principal underwriter for the Master
permit Funds of Funds to acquire Fund
(‘‘Deposit Instruments’’), and Fund, to sell shares of the Master Fund
shares beyond the limits of section
shareholders redeeming their shares to the Feeder Fund beyond the
12(d)(1)(A) of the Act; and the Funds,
will receive specified instruments limitations in section 12(d)(1)(B).
(‘‘Redemption Instruments’’). The and any principal underwriter for the
10. Section 6(c) of the Act permits the
Deposit Instruments and the Funds, and/or any broker or dealer
Commission to exempt any persons or
Redemption Instruments will each registered under the Exchange Act, to
transactions from any provision of the
correspond pro rata to the positions in sell shares to Funds of Funds beyond
Act if such exemption is necessary or
the Fund’s portfolio (including cash the limits of section 12(d)(1)(B) of the
appropriate in the public interest and
positions) except as specified in the Act. The Application’s terms and
consistent with the protection of
Application. conditions are designed to, among other
investors and the purposes fairly
4. Because shares will not be things, help prevent any potential (i)
intended by the policy and provisions of
individually redeemable, applicants undue influence over a Fund through
the Act. Section 12(d)(1)(J) of the Act
request an exemption from section control or voting power, or in
provides that the Commission may
5(a)(1) and section 2(a)(32) of the Act connection with certain services,
exempt any person, security, or
that would permit the Funds to register transactions, and underwritings, (ii) transaction, or any class or classes of
as open-end management investment excessive layering of fees, and (iii) persons, securities, or transactions, from
companies and issue shares that are overly complex fund structures, which any provision of section 12(d)(1) if the
redeemable in Creation Units only. are the concerns underlying the limits exemption is consistent with the public
5. Applicants also request an in sections 12(d)(1)(A) and (B) of the interest and the protection of investors.
exemption from section 22(d) of the Act Act. Section 17(b) of the Act authorizes the
and rule 22c–1 under the Act as 8. Applicants request an exemption Commission to grant an order
secondary market trading in shares will from sections 17(a)(1) and 17(a)(2) of the permitting a transaction otherwise
take place at negotiated prices, not at a Act to permit persons that are Affiliated prohibited by section 17(a) if it finds
current offering price described in a Persons, or Second-Tier Affiliates, of the that (a) the terms of the proposed
Fund’s prospectus, and not at a price Funds, solely by virtue of certain transaction are fair and reasonable and
based on NAV. Applicants state that (a) ownership interests, to effectuate do not involve overreaching on the part
secondary market trading in shares does purchases and redemptions in-kind. The of any person concerned; (b) the
not involve a Fund as a party and will deposit procedures for in-kind proposed transaction is consistent with
not result in dilution of an investment purchases of Creation Units and the the policies of each registered
in shares, and (b) to the extent different redemption procedures for in-kind investment company involved; and (c)
prices exist during a given trading day, redemptions of Creation Units will be the proposed transaction is consistent
or from day to day, such variances occur the same for all purchases and with the general purposes of the Act.
as a result of third-party market forces, redemptions and Deposit Instruments For the Commission, by the Division of
such as supply and demand. Therefore, and Redemption Instruments will be Investment Management, under delegated
applicants assert that secondary market valued in the same manner as those authority.
transactions in shares will not lead to investment positions currently held by Eduardo A. Aleman,
discrimination or preferential treatment the Funds. Applicants also seek relief Assistant Secretary.
among purchasers. Finally, applicants from the prohibitions on affiliated
represent that share market prices will [FR Doc. 2018–14843 Filed 7–10–18; 8:45 am]
transactions in section 17(a) to permit a
be disciplined by arbitrage Fund to sell its shares to and redeem its
BILLING CODE 8011–01–P
opportunities, which should prevent shares from a Fund of Funds, and to
shares from trading at a material engage in the accompanying in-kind
discount or premium from NAV. SECURITIES AND EXCHANGE
transactions with the Fund of Funds.3 COMMISSION
6. With respect to Funds that effect
The purchase of Creation Units by a
creations and redemptions of Creation [Release No. 34–83599; File No. SR–
Fund of Funds directly from a Fund will
Units in kind and that are based on CboeEDGX–2018–022]
be accomplished in accordance with the
certain Underlying Indexes that include
foreign securities, applicants request Self-Regulatory Organizations; Cboe
3 The
requested relief would apply to direct sales
relief from the requirement imposed by EDGX Exchange, Inc.; Notice of Filing
of shares in Creation Units by a Fund to a Fund of
and Immediate Effectiveness of a
daltland on DSKBBV9HB2PROD with NOTICES
Funds and redemptions of those shares. Applicants,
2 Each Self-Indexing Fund will post on its website moreover, are not seeking relief from section 17(a) Proposed Rule Change Related to Fees
the identities and quantities of the investment for, and the requested relief will not apply to, for Use on the Exchange’s Equity
positions that will form the basis for the Fund’s transactions where a Fund could be deemed an Options Platform
calculation of its NAV at the end of the day. Affiliated Person, or a Second-Tier Affiliate, of a
Applicants believe that requiring Self-Indexing Fund of Funds because an Adviser or an entity July 6, 2018.
Funds to maintain full portfolio transparency will controlling, controlled by or under common control
help address, together with other protections, with an Adviser provides investment advisory Pursuant to Section 19(b)(1) of the
conflicts of interest with respect to such Funds. services to that Fund of Funds. Securities Exchange Act of 1934 (the
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![32170 Federal Register / Vol. 83, No. 133 / Wednesday, July 11, 2018 / Notices
• Send an email to rule-comments@ SECURITIES AND EXCHANGE forth in Sections A, B, and C below, of
sec.gov. Please include File Number SR– COMMISSION the most significant parts of such
CboeEDGX–2018–022 on the subject statements.
[Release No. 34–83600; File No. SR–
line. CboeEDGX–2018–024] A. Self-Regulatory Organization’s
Paper Comments Statement of the Purpose of, and
Self-Regulatory Organizations; Cboe Statutory Basis for, the Proposed Rule
• Send paper comments in triplicate EDGX Exchange, Inc.; Notice of Filing Change
to Secretary, Securities and Exchange and Immediate Effectiveness of a
Proposed Rule Change Related to Fees 1. Purpose
Commission, 100 F Street NE,
Washington, DC 20549–1090. for Use on the Exchange’s Equity The Exchange proposes to implement
Options Platform proposed changes to its fee schedule for
All submissions should refer to File its equity options platform (‘‘EDGX
Number SR–CboeEDGX–2018–022. This July 6, 2018.
Options’’) relating to logical and
file number should be included on the Pursuant to Section 19(b)(1) of the physical connectivity fees, effective July
subject line if email is used. To help the Securities Exchange Act of 1934 (the 2, 2018.
Commission process and review your ‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on June 29, Logical Connectivity
comments more efficiently, please use
only one method. The Commission will 2018, Cboe EDGX Exchange, Inc. (the The Exchange proposes to amend
‘‘Exchange’’ or ‘‘EDGX’’) filed with the certain logical connectivity fees.
post all comments on the Commission’s
Securities and Exchange Commission Currently, EDGX Options market
internet website (http://www.sec.gov/
(‘‘Commission’’) the proposed rule participants may utilize a variety of
rules/sro.shtml). Copies of the
change as described in Items I, II and III logical connectivity ports. A logical port
submission, all subsequent below, which Items have been prepared
amendments, all written statements provides users with the ability within
by the Exchange. The Exchange has the Exchange’s system to accomplish a
with respect to the proposed rule designated the proposed rule change as specific function through a connection,
change that are filed with the one establishing or changing a member such as order entry, data receipt, or
Commission, and all written due, fee, or other charge imposed by the access to information. Currently, with
communications relating to the Exchange under Section 19(b)(3)(A)(ii) respect to logical port fees, the Exchange
proposed rule change between the of the Act 3 and Rule 19b–4(f)(2) only assesses a fee for Purge Ports.
Commission and any person, other than thereunder,4 which renders the Additionally, logical connectivity fees
those that may be withheld from the proposed rule change effective upon are limited to logical ports in the
public in accordance with the filing with the Commission. The Exchange’s primary data center and no
provisions of 5 U.S.C. 552, will be Commission is publishing this notice to logical port fees are assessed for
available for website viewing and solicit comments on the proposed rule redundant secondary data center ports.
printing in the Commission’s Public change from interested persons. The Exchange first proposes to adopt
Reference Room, 100 F Street NE, I. Self-Regulatory Organization’s a $500 per month, per port fee for all
Washington, DC 20549, on official Statement of the Terms of Substance of logical ports excluding Purge, Multicast
business days between the hours of the Proposed Rule Change Pitch Spin Server, GRP and Bulk Ports.5
10:00 a.m. and 3:00 p.m. Copies of the The Exchange notes that fees for these
filing also will be available for The Exchange filed a proposal to excluded ports are explicitly set forth in
implement proposed changes to its fee the Fees Schedule. The Exchange notes
inspection and copying at the principal
schedule for its equity options platform that the proposed fee of $500 per port
office of the Exchange. All comments
(‘‘EDGX Options’’) relating to logical is in line with the fee assessed for
received will be posted without change.
and physical connectivity fees, effective similar ports on BZX Options and C2
Persons submitting comments are July 2, 2018.
cautioned that we do not redact or edit Options.6
The text of the proposed rule change Next, the Exchange proposes to adopt
personal identifying information from is available at the Exchange’s website at fees for Multicast PITCH/Spin Server
comment submissions. You should www.markets.cboe.com, at the principal and GRP ports. Multicast PITCH Spin
submit only information that you wish office of the Exchange, and at the Server Ports and GRP Ports are used to
to make available publicly. All Commission’s Public Reference Room. request and receive a retransmission of
submissions should refer to File data from the Exchange’s Multicast
Number SR–CboeEDGX–2018–022 and II. Self-Regulatory Organization’s
Statement of the Purpose of, and PITCH data feed. The Exchange’s
should be submitted on or before Multicast PITCH/Top data feed is
Statutory Basis for, the Proposed Rule
August 1, 2018. available from two primary feeds,
Change
For the Commission, by the Division of identified as the ‘‘A feed’’ and the ‘‘C
In its filing with the Commission, the feed’’, which contain the same
Trading and Markets, pursuant to delegated
Exchange included statements information but differ only in the way
authority.11
concerning the purpose of and basis for such feeds are received. The Exchange
Eduardo A. Aleman, the proposed rule change and discussed
Assistant Secretary.
also offers two redundant feeds,
any comments it received on the
[FR Doc. 2018–14848 Filed 7–10–18; 8:45 am] proposed rule change. The text of these 5 The Exchange notes that even though Ports with
statements may be examined at the
daltland on DSKBBV9HB2PROD with NOTICES
BILLING CODE 8011–01–P Bulk Quoting Capabilities (‘‘Bulk Ports’’) already
places specified in Item IV below. The has its own line item in the logical connectivity fees
Exchange has prepared summaries, set table, it’s not explicitly excluded from the general
‘‘Logical Ports’’ line item. The Exchange proposes
to add a reference relating to its exclusion to
1 15 U.S.C. 78s(b)(1). maintain clarity in the Fees Schedule.
2 17 CFR 240.19b–4. 6 See Cboe BZX Options Exchange Fee Schedule,
3 15 U.S.C. 78s(b)(3)(A)(ii).
Options Logical Port Fees and Cboe C2 Options
11 17 CFR 200.30–3(a)(12). 4 17 CFR 240.19b–4(f)(2). Exchange Fees Schedule, Logical Connectivity Fees.
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Document Created: 2018-07-10 23:53:18
Document Modified: 2018-07-10 23:53:18
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 83 FR 32168 |
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