83 FR 44114 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Amending the Fee Schedule To Eliminate Fee Code IX on Cboe BZX Exchange, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 168 (August 29, 2018)

[Federal Register Volume 83, Number 168 (Wednesday, August 29, 2018)]
[Notices]
[Pages 44114-44115]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-18677]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83926; File No. SR-CboeBZX-2018-060]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Amending 
the Fee Schedule To Eliminate Fee Code IX on Cboe BZX Exchange, Inc.

August 23, 2018.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on August 9, 2018, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. The Exchange 
has designated this proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6)(iii) thereunder,\4\ which renders it 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).
    \4\ 17 CFR 240.19b-4(f)(6)(iii).
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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 Exchange's fee schedule 
applicable to its equities trading platform to eliminate fee code IX, 
which applies to orders routed to Investors Exchange LLC using the 
Exchange's TRIM or TRIM2 routing strategies.
    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 purpose of the proposed rule change is to amend the Exchange's 
fee schedule applicable to its equities trading platform (``BZX 
Equities'') to eliminate fee code IX,\5\ which applies to orders routed 
to Investors Exchange LLC (``IEX'') using the Exchange's TRIM or TRIM2 
\6\ routing strategies. Currently, the fee schedule provides that 
orders routed to IEX using the TRIM or TRIM2 routing strategies are 
charged a fee of $0.0010 per share under fee code IX. In May 2018, the 
Exchange removed IEX from the System routing table for its TRIM and 
TRIM2 routing strategies,\7\ which are designed to route to low cost 
away markets, due to increased costs associated with routing to IEX. 
Since IEX is no longer considered as a potential routing destination 
for those strategies, the Exchange proposes to eliminate fee code IX. 
Orders routed to IEX using other routing strategies will not be 
impacted by this proposed rule change and will continue to be charged 
the same rates as in place today.
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    \5\ IX is associated with order [sic] routed to IEX using TRIM 
or TRIM2 routing strategy.
    \6\ TRIM and TRIM2 are both routing options under which an order 
checks the System for available shares and then is sent to 
destinations on the applicable System routing table. See Rule 
11.13(b)(3)(G).
    \7\ The term ``System routing table'' refers to the proprietary 
process for determining the specific trading venues to which the 
System routes orders and the order in which it routes them. See Rule 
11.13(b)(3). Rule 11.13(b)(3) permits the Exchange to maintain a 
different System routing table for different routing options and to 
modify the System routing table at any time without notice.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \8\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \9\ in particular, in that it is designed to promote 
just and equitable principles of trade, to foster cooperation and 
coordination with persons engaged in facilitating transactions in 
securities, to remove impediments to and perfect the mechanism of a 
free and open market and a national market system and, in general, to 
protect investors and the public interest.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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    The Exchange believes that the proposed change to eliminate fee 
code IX is consistent with the public interest and the protection [sic] 
investors as this is a non-substantive change being made because the 
Exchange no longer routes to IEX using the routing strategies specified 
in that fee code. The Exchange had previously routed orders to IEX 
using the TRIM and TRIM2 order routing strategies, which are designed 
to route to low cost venues, but recently stopped doing so due to 
increased routing costs associated with trading on IEX. As such, the 
Exchange believes that updating the fee schedule to reflect that these 
two routing strategies are not available for routing to IEX will 
increase transparency around the operation of the Exchange to the 
benefit of Members and investors. Because the proposed changes apply 
only to a fee code that is no longer in use on the Exchange, the 
proposed rule change will have no impact on the transaction fees 
actually assessed to Members.

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in any burden on competition that is not

[[Page 44115]]

necessary or appropriate in furtherance of the purposes of the Act, as 
amended. The proposed rule change eliminates a fee code that is no 
longer in use by the Exchange due to the fact that IEX is no longer an 
eligible destination for the TRIM and TRIM2 routing strategies. As the 
proposed rule change only makes a non-substantive change to retire a 
fee code that is not currently in use, the Exchange believes that it 
will not cause any significant burden on competition.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \10\ and Rule 19b-
4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the 
Act \12\ normally does not become operative for 30 days after the date 
of its filing. However, Rule 19b-4(f)(6)(iii) \13\ permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has asked the Commission to waive the 30-day operative delay so that 
the proposed rule change may become operative immediately upon filing. 
The Exchange notes that waiver of the operative delay would allow it to 
immediately remove an outdated fee code from its fee schedule, the 
elimination of which would ensure that the fee schedule properly 
reflects the routing strategies currently available for routing to IEX. 
The Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because the proposed rule change is designed to increase transparency 
around the operation of the Exchange and the routing strategies that it 
provides. Accordingly, the Commission hereby waives the operative delay 
and designates the proposal operative upon filing.\14\
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    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ For purposes only of waiving the 30-day operative delay, 
the Commission has also considered the proposed rule's impact on 
efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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: (i) 
Necessary or appropriate in the public interest; (ii) for the 
protection of investors; or (iii) otherwise in furtherance of the 
purposes of the Act. If the Commission takes such action, the 
Commission shall institute proceedings to determine whether the 
proposed rule change should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposal 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-2018-060 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-CboeBZX-2018-060. 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 such filing will also 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-CboeBZX-2018-060 and should be submitted 
on or before September 19, 2018.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-18677 Filed 8-28-18; 8:45 am]
 BILLING CODE 8011-01-P