83_FR_52792 83 FR 52591 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees on Cboe BZX Exchange, Inc.

83 FR 52591 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees on Cboe BZX Exchange, Inc.

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 201 (October 17, 2018)

Page Range52591-52593
FR Document2018-22533

Federal Register, Volume 83 Issue 201 (Wednesday, October 17, 2018)
[Federal Register Volume 83, Number 201 (Wednesday, October 17, 2018)]
[Notices]
[Pages 52591-52593]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-22533]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84401; File No. SR-CboeBZX-2018-075]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Related to 
Fees on Cboe BZX Exchange, Inc.

October 11, 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 October 1, 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, II 
and III below, which Items have been prepared by the Exchange. The 
Exchange has designated the proposed rule change as one establishing or 
changing a member due, fee, or other charge imposed by the Exchange 
under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ which renders the proposed rule change effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange filed a proposal to add certain fees related to the 
listing and trading of options that overlie the Russell 2000 Index 
(``RUT options'').
    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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On September 27, 2018, the Exchange's equity options platform 
(``BZX Options'') received approval from the Commission to list and 
trade RUT options.\5\ The Exchange intends to begin listing RUT options 
for trading on October 1, 2018. Accordingly, the Exchange proposes to 
amend its Fees Schedule for BZX Options to add: (i) An Index License 
Surcharge Fee to all Non-Customer transactions in RUT options; (ii) Fee 
codes for RUT options that add or remove liquidity on the Exchange; and 
(iii) Fee codes for RUT options that are routed away from the Exchange, 
effective October 1, 2018.
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    \5\ See Securities Exchange Act Release No. 84298 (September 27, 
2018) (SR-CboeBZX-2018-058).

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[[Page 52592]]

RUT Surcharge Fee
    The Exchange proposes to add an Index License Surcharge Fee of 
$0.45 per contract to all Non-Customer transactions (i.e., Market Maker 
and Away Market Maker, Firm, Broker Dealer, Joint Back Office, and 
Professional transactions) in RUT options. The proposed RUT Surcharge 
Fee will be assessed on all non-Customer orders that contain one of the 
proposed Fee codes described below (BM, BN, BO, GM, GN, and GO).
Fee Codes for RUT Options--Add or Remove Liquidity
    Proposed Fee code BC will be appended to all Customer orders in RUT 
options that add or remove liquidity, and result in a standard fee of 
$0.15 per contract. Proposed Fee code BM will be appended to all Market 
Maker orders in RUT options that add or remove liquidity, and result in 
a standard fee of $0.35 per contract. Proposed Fee code BN will be 
appended to all Non-Customer and Non-Market Maker orders in RUT options 
that add or remove liquidity, and result in a standard fee of $0.55 per 
contract. Proposed Fee code BO will be appended to all orders in RUT 
options that trade on the open, and will be free. Proposed Footnote 14 
attaches to each of the proposed non-Customer Fee codes to the 
Surcharge Fee described above.
Fee Codes for RUT Options--Routed Away
    Proposed Fee code GC will be appended to all Customer orders in RUT 
options that are routed away from the Exchange and executed at another 
exchange, and result in a standard fee of $0.85 per contract. Proposed 
Fee code GM will be appended to all Market Maker orders in RUT options 
that are routed away from the Exchange and executed at another 
exchange, and result in a standard fee of $1.05 per contract. Proposed 
Fee code GN will be appended to all Non-Customer and Non-Market Maker 
orders in RUT options that are routed away from the Exchange and 
executed at another exchange, and result in a standard fee of $1.25 per 
contract. Proposed Fee code GO will be appended to all orders in RUT 
options that route to another exchange at the open, and will be free. 
Proposed Footnote 14 attaches each of these proposed Fee codes to the 
Surcharge Fee described above.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the Section 6 of the Act,\6\ in general, and Section 6(b)(4),\7\ 
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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    First, the Exchange believes implementing the RUT Surcharge Fee is 
equitable and not unfairly discriminatory because the amount will be 
assessed to all orders of non-Customer market participants to whom the 
RUT Surcharge Fee applies. Not applying the RUT Surcharge Fee to 
Customer orders is equitable and not unfairly discriminatory because 
this is designed to attract Customer RUT orders, which increases 
liquidity and provides greater trading opportunities to all market 
participants.
    Next, the Exchange believes it is reasonable to charge different 
fee amounts to different user types in the manner proposed because the 
proposed fees are consistent with the price differentiation that exists 
today at other options exchanges (for example, the proposed fees are 
comparable with fees for other index option products traded on other 
exchanges, including RUT).\8\ Additionally, the Exchange believes the 
proposed fee amounts for RUT orders are reasonable because the proposed 
fee amounts are within the range of standard transaction fee amounts 
charged for RUT at other options exchanges (i.e., Cboe Options and C2 
Options).\9\
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    \8\ See, e.g., C2 Fees Schedule, Fee Codes and Associated Fees.
    \9\ See e.g., C2 Fees Schedule, Fee Codes and Associated Fees, 
which shows that standard transaction fees for RUT orders range from 
$0.15 per contract to $0.55 per contract.
---------------------------------------------------------------------------

    The Exchange also believes that it is equitable and not unfairly 
discriminatory to assess lower fees to Customers as compared to other 
market participants because Customer order flow enhances liquidity on 
the Exchange for the benefit of all market participants. Specifically, 
Customer liquidity benefits all market participants by providing more 
trading opportunities, which attracts Market Makers. An increase in the 
activity of these market participants in turn facilitates tighter 
spreads, which may cause an additional corresponding increase in order 
flow from other market participants. Moreover, the options industry has 
a long history of providing preferential pricing to Customers, and the 
Exchange's current Fees Schedule currently does so in many places, as 
do the fees structures of many other exchanges. The Exchange notes that 
all fee amounts listed as applying to Customers will be applied equally 
to all Customers (meaning that all Customers will be assessed the same 
amount).
    Additionally, the Exchange believes that it is equitable and not 
unfairly discriminatory to assess lower fees to Market Makers as 
compared to other market participants other than Customers because 
Market Makers, unlike other market participants, take on a number of 
obligations, including quoting obligations, that other market 
participants do not have. Further, these lower fees offered to Market 
Makers are intended to incent Market Makers to quote and trade more on 
BZX Options, thereby providing more trading opportunities for all 
market participants. The Exchange notes that all fee amounts listed as 
applying to Market Makers will be applied equally to all Market Makers 
(meaning that all Market Makers will be assessed the same amount). 
Similarly, the Exchange notes that the RUT fee amounts for each 
separate type of other market participant will be assessed equally to 
all such market participants (i.e. all Broker-Dealer orders will be 
assessed the same amount, all Joint Back-Office orders will be assessed 
the same amount, etc.).
    Finally, the Exchange believes its proposed fees for RUT orders 
that are routed away from the Exchange are reasonable taking into 
account routing costs and also notes that the proposed fees are in line 
with amounts assessed by other exchanges.\10\ For the reasons described 
above, the Exchange also believes that it is equitable and not unfairly 
discriminatory to assess lower routing fees to Customers and Market 
Makers as compared to other market participants. The Exchange notes 
that routing through the Exchange is voluntary and market participants 
can readily direct order flow to another exchange if they deem Exchange 
fee levels to be excessive.
---------------------------------------------------------------------------

    \10\ See, e.g., C2 Fees Schedule, Linkage Routing Fees.
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes the proposed amendments to its Fees 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 rule change will impose any burden 
on intramarket competition that is not necessary or appropriate in 
furtherance of the purposes of the Act because the RUT fee amounts for 
each separate type of market participant will be assessed equally to 
all such market

[[Page 52593]]

participants. While different fees are assessed to different market 
participants in some circumstances, these different market participants 
have different obligations and different circumstances as discussed 
above. For example, Market Makers have quoting obligations that other 
market participants do not have. Further, the proposed fees structure 
for RUT is intended to encourage more trading of RUT, which brings 
liquidity to the Exchange and benefits all market participants.
    The Exchange also does not believe that the proposed rule changes 
will impose any burden on intermarket competition that is not necessary 
or appropriate in furtherance of the purposes of the Act because the 
proposed RUT fees are in line with amounts assessed by other exchanges.

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 \11\ and paragraph (f) of Rule 19b-4 
thereunder.\12\ 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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 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 Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-CboeBZX-2018-075 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-2018-075. 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-CboeBZX-2018-075, and should be 
submitted on or before November 7, 2018.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-22533 Filed 10-16-18; 8:45 am]
 BILLING CODE 8011-01-P



                                                                         Federal Register / Vol. 83, No. 201 / Wednesday, October 17, 2018 / Notices                                                  52591

                                               and that it believes that the Purge Ports               submission, all subsequent                            due, fee, or other charge imposed by the
                                               will provide an effective risk                          amendments, all written statements                    Exchange under Section 19(b)(3)(A)(ii)
                                               management tool for Users trading                       with respect to the proposed rule                     of the Act 3 and Rule 19b–4(f)(2)
                                               equities. The Commission believes that                  change that are filed with the                        thereunder,4 which renders the
                                               Purge Ports may be a helpful tool for                   Commission, and all written                           proposed rule change effective upon
                                               managing the risk associated with                       communications relating to the                        filing with the Commission. The
                                               trading equities, and notes that this can               proposed rule change between the                      Commission is publishing this notice to
                                               be important both for individual market                 Commission and any person, other than                 solicit comments on the proposed rule
                                               participants and the market in general.                 those that may be withheld from the                   change from interested persons.
                                               Accordingly, the Commission believes                    public in accordance with the
                                               that permitting this feature to be                      provisions of 5 U.S.C. 552, will be                   I. Self-Regulatory Organization’s
                                               operative upon filing is consistent with                available for website viewing and                     Statement of the Terms of Substance of
                                               the protection of investors and the                     printing in the Commission’s Public                   the Proposed Rule Change
                                               public interest. Therefore, the                         Reference Room, 100 F Street NE,
                                               Commission hereby waives the 30-day                     Washington, DC 20549, on official                        The Exchange filed a proposal to add
                                               operative delay and designates the                      business days between the hours of                    certain fees related to the listing and
                                               proposed rule change as operative upon                  10:00 a.m. and 3:00 p.m. Copies of the                trading of options that overlie the
                                               filing.21                                               filing also will be available for                     Russell 2000 Index (‘‘RUT options’’).
                                                  At any time within 60 days of the                    inspection and copying at the principal                  The text of the proposed rule change
                                               filing of the proposed rule change, the                 office of the Exchange. All comments                  is available at the Exchange’s website at
                                               Commission summarily may                                received will be posted without change.               www.markets.cboe.com, at the principal
                                               temporarily suspend such rule change if                 Persons submitting comments are                       office of the Exchange, and at the
                                               it appears to the Commission that such                  cautioned that we do not redact or edit               Commission’s Public Reference Room.
                                               action is: (i) Necessary or appropriate in              personal identifying information from
                                               the public interest; (ii) for the protection            comment submissions. You should                       II. Self-Regulatory Organization’s
                                               of investors; or (iii) otherwise in                     submit only information that you wish                 Statement of the Purpose of, and
                                               furtherance of the purposes of the Act.                 to make available publicly. All                       Statutory Basis for, the Proposed Rule
                                               If the Commission takes such action, the                submissions should refer to File                      Change
                                               Commission shall institute proceedings                  Number SR–CboeBZX–2018–074 and
                                               to determine whether the proposed rule                  should be submitted on or before                        In its filing with the Commission, the
                                               should be approved or disapproved.                      November 7, 2018.                                     Exchange included statements
                                                                                                                                                             concerning the purpose of and basis for
                                               IV. Solicitation of Comments                              For the Commission, by the Division of              the proposed rule change and discussed
                                                                                                       Trading and Markets, pursuant to delegated
                                                 Interested persons are invited to                     authority.22                                          any comments it received on the
                                               submit written data, views, and                         Eduardo A. Aleman,
                                                                                                                                                             proposed rule change. The text of these
                                               arguments concerning the foregoing,                                                                           statements may be examined at the
                                                                                                       Assistant Secretary.
                                               including whether the proposed rule                                                                           places specified in Item IV below. The
                                                                                                       [FR Doc. 2018–22535 Filed 10–16–18; 8:45 am]
                                               change is consistent with the Act.                                                                            Exchange has prepared summaries, set
                                                                                                       BILLING CODE 8011–01–P
                                               Comments may be submitted by any of                                                                           forth in Sections A, B, and C below, of
                                               the following methods:                                                                                        the most significant parts of such
                                                                                                                                                             statements.
                                               Electronic Comments                                     SECURITIES AND EXCHANGE
                                                 • Use the Commission’s internet                       COMMISSION                                            A. Self-Regulatory Organization’s
                                               comment form (http://www.sec.gov/                       [Release No. 34–84401; File No. SR–                   Statement of the Purpose of, and the
                                               rules/sro.shtml); or                                    CboeBZX–2018–075]                                     Statutory Basis for, the Proposed Rule
                                                 • Send an email to rule-comments@                                                                           Change
                                               sec.gov. Please include File Number SR–                 Self-Regulatory Organizations; Cboe
                                                                                                       BZX Exchange, Inc.; Notice of Filing                  1. Purpose
                                               CboeBZX–2018–074 on the subject line.
                                                                                                       and Immediate Effectiveness of a                         On September 27, 2018, the
                                               Paper Comments                                          Proposed Rule Change Related to Fees                  Exchange’s equity options platform
                                                  • Send paper comments in triplicate                  on Cboe BZX Exchange, Inc.                            (‘‘BZX Options’’) received approval
                                               to Secretary, Securities and Exchange                                                                         from the Commission to list and trade
                                                                                                       October 11, 2018.
                                               Commission, 100 F Street NE,
                                                                                                          Pursuant to Section 19(b)(1) of the                RUT options.5 The Exchange intends to
                                               Washington, DC 20549–1090.
                                                                                                       Securities Exchange Act of 1934 (the                  begin listing RUT options for trading on
                                               All submissions should refer to File                                                                          October 1, 2018. Accordingly, the
                                                                                                       ‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                               Number SR–CboeBZX–2018–074. This                                                                              Exchange proposes to amend its Fees
                                                                                                       notice is hereby given that on October
                                               file number should be included on the                                                                         Schedule for BZX Options to add: (i) An
                                                                                                       1, 2018, Cboe BZX Exchange, Inc. (the
                                               subject line if email is used. To help the              ‘‘Exchange’’ or ‘‘BZX’’) filed with the               Index License Surcharge Fee to all Non-
                                               Commission process and review your                      Securities and Exchange Commission                    Customer transactions in RUT options;
                                               comments more efficiently, please use                   (‘‘Commission’’) the proposed rule                    (ii) Fee codes for RUT options that add
                                               only one method. The Commission will                    change as described in Items I, II and III            or remove liquidity on the Exchange;
                                               post all comments on the Commission’s                   below, which Items have been prepared                 and (iii) Fee codes for RUT options that
daltland on DSKBBV9HB2PROD with NOTICES




                                               internet website (http://www.sec.gov/                   by the Exchange. The Exchange has                     are routed away from the Exchange,
                                               rules/sro.shtml). Copies of the                         designated the proposed rule change as                effective October 1, 2018.
                                                  21 For purposes only of waiving the 30-day
                                                                                                       one establishing or changing a member
                                                                                                                                                               3 15 U.S.C. 78s(b)(3)(A)(ii).
                                               operative delay, the Commission has also
                                                                                                         22 17 CFR 200.30–3(a)(12).                            4 17
                                               considered the proposed rule’s impact on                                                                             CFR 240.19b–4(f)(2).
                                                                                                         1 15 U.S.C. 78s(b)(1).
                                               efficiency, competition, and capital formation. See                                                             5 See Securities Exchange Act Release No. 84298

                                               15 U.S.C. 78c(f).                                         2 17 CFR 240.19b–4.                                 (September 27, 2018) (SR–CboeBZX–2018–058).



                                          VerDate Sep<11>2014   19:46 Oct 16, 2018   Jkt 247001   PO 00000   Frm 00216   Fmt 4703   Sfmt 4703   E:\FR\FM\17OCN1.SGM   17OCN1


                                               52592                     Federal Register / Vol. 83, No. 201 / Wednesday, October 17, 2018 / Notices

                                               RUT Surcharge Fee                                       the Section 6 of the Act,6 in general, and            fee amounts listed as applying to
                                                                                                       Section 6(b)(4),7 in particular, as it is             Customers will be applied equally to all
                                                  The Exchange proposes to add an                      designed to provide for the equitable                 Customers (meaning that all Customers
                                               Index License Surcharge Fee of $0.45                    allocation of reasonable dues, fees and               will be assessed the same amount).
                                               per contract to all Non-Customer                        other charges among its Members and                      Additionally, the Exchange believes
                                               transactions (i.e., Market Maker and                    other persons using its facilities.                   that it is equitable and not unfairly
                                               Away Market Maker, Firm, Broker                            First, the Exchange believes                       discriminatory to assess lower fees to
                                               Dealer, Joint Back Office, and                          implementing the RUT Surcharge Fee is                 Market Makers as compared to other
                                               Professional transactions) in RUT                       equitable and not unfairly                            market participants other than
                                               options. The proposed RUT Surcharge                     discriminatory because the amount will                Customers because Market Makers,
                                               Fee will be assessed on all non-                        be assessed to all orders of non-                     unlike other market participants, take
                                               Customer orders that contain one of the                 Customer market participants to whom                  on a number of obligations, including
                                               proposed Fee codes described below                      the RUT Surcharge Fee applies. Not                    quoting obligations, that other market
                                               (BM, BN, BO, GM, GN, and GO).                           applying the RUT Surcharge Fee to                     participants do not have. Further, these
                                               Fee Codes for RUT Options—Add or                        Customer orders is equitable and not                  lower fees offered to Market Makers are
                                               Remove Liquidity                                        unfairly discriminatory because this is               intended to incent Market Makers to
                                                                                                       designed to attract Customer RUT                      quote and trade more on BZX Options,
                                                  Proposed Fee code BC will be                         orders, which increases liquidity and                 thereby providing more trading
                                               appended to all Customer orders in RUT                  provides greater trading opportunities to             opportunities for all market
                                               options that add or remove liquidity,                   all market participants.                              participants. The Exchange notes that
                                               and result in a standard fee of $0.15 per                  Next, the Exchange believes it is                  all fee amounts listed as applying to
                                               contract. Proposed Fee code BM will be                  reasonable to charge different fee                    Market Makers will be applied equally
                                               appended to all Market Maker orders in                  amounts to different user types in the                to all Market Makers (meaning that all
                                               RUT options that add or remove                          manner proposed because the proposed                  Market Makers will be assessed the
                                               liquidity, and result in a standard fee of              fees are consistent with the price                    same amount). Similarly, the Exchange
                                               $0.35 per contract. Proposed Fee code                   differentiation that exists today at other            notes that the RUT fee amounts for each
                                               BN will be appended to all Non-                         options exchanges (for example, the                   separate type of other market participant
                                               Customer and Non-Market Maker orders                    proposed fees are comparable with fees                will be assessed equally to all such
                                               in RUT options that add or remove                       for other index option products traded                market participants (i.e. all Broker-
                                               liquidity, and result in a standard fee of              on other exchanges, including RUT).8                  Dealer orders will be assessed the same
                                               $0.55 per contract. Proposed Fee code                   Additionally, the Exchange believes the               amount, all Joint Back-Office orders will
                                               BO will be appended to all orders in                    proposed fee amounts for RUT orders                   be assessed the same amount, etc.).
                                               RUT options that trade on the open, and                 are reasonable because the proposed fee                  Finally, the Exchange believes its
                                               will be free. Proposed Footnote 14                      amounts are within the range of                       proposed fees for RUT orders that are
                                               attaches to each of the proposed non-                   standard transaction fee amounts                      routed away from the Exchange are
                                               Customer Fee codes to the Surcharge                     charged for RUT at other options                      reasonable taking into account routing
                                               Fee described above.                                    exchanges (i.e., Cboe Options and C2                  costs and also notes that the proposed
                                                                                                       Options).9                                            fees are in line with amounts assessed
                                               Fee Codes for RUT Options—Routed                           The Exchange also believes that it is              by other exchanges.10 For the reasons
                                               Away                                                    equitable and not unfairly                            described above, the Exchange also
                                                                                                       discriminatory to assess lower fees to                believes that it is equitable and not
                                                 Proposed Fee code GC will be
                                                                                                       Customers as compared to other market                 unfairly discriminatory to assess lower
                                               appended to all Customer orders in RUT
                                                                                                       participants because Customer order                   routing fees to Customers and Market
                                               options that are routed away from the
                                                                                                       flow enhances liquidity on the                        Makers as compared to other market
                                               Exchange and executed at another
                                                                                                       Exchange for the benefit of all market                participants. The Exchange notes that
                                               exchange, and result in a standard fee of
                                                                                                       participants. Specifically, Customer                  routing through the Exchange is
                                               $0.85 per contract. Proposed Fee code
                                                                                                       liquidity benefits all market participants            voluntary and market participants can
                                               GM will be appended to all Market
                                                                                                       by providing more trading                             readily direct order flow to another
                                               Maker orders in RUT options that are
                                                                                                       opportunities, which attracts Market                  exchange if they deem Exchange fee
                                               routed away from the Exchange and
                                                                                                       Makers. An increase in the activity of                levels to be excessive.
                                               executed at another exchange, and
                                                                                                       these market participants in turn
                                               result in a standard fee of $1.05 per                                                                         B. Self-Regulatory Organization’s
                                                                                                       facilitates tighter spreads, which may
                                               contract. Proposed Fee code GN will be                                                                        Statement on Burden on Competition
                                                                                                       cause an additional corresponding
                                               appended to all Non-Customer and Non-
                                                                                                       increase in order flow from other market                 The Exchange believes the proposed
                                               Market Maker orders in RUT options
                                                                                                       participants. Moreover, the options                   amendments to its Fees Schedule would
                                               that are routed away from the Exchange
                                                                                                       industry has a long history of providing              not impose any burden on competition
                                               and executed at another exchange, and
                                                                                                       preferential pricing to Customers, and                that is not necessary or appropriate in
                                               result in a standard fee of $1.25 per
                                                                                                       the Exchange’s current Fees Schedule                  furtherance of the purposes of the Act.
                                               contract. Proposed Fee code GO will be
                                                                                                       currently does so in many places, as do               The Exchange does not believe that the
                                               appended to all orders in RUT options
                                                                                                       the fees structures of many other                     proposed rule change will impose any
                                               that route to another exchange at the
                                                                                                       exchanges. The Exchange notes that all                burden on intramarket competition that
                                               open, and will be free. Proposed
                                                                                                                                                             is not necessary or appropriate in
daltland on DSKBBV9HB2PROD with NOTICES




                                               Footnote 14 attaches each of these                        6 15  U.S.C. 78f.
                                               proposed Fee codes to the Surcharge                                                                           furtherance of the purposes of the Act
                                                                                                         7 15  U.S.C. 78f(b)(4).
                                               Fee described above.                                                                                          because the RUT fee amounts for each
                                                                                                          8 See, e.g., C2 Fees Schedule, Fee Codes and

                                                                                                       Associated Fees.
                                                                                                                                                             separate type of market participant will
                                               2. Statutory Basis                                         9 See e.g., C2 Fees Schedule, Fee Codes and        be assessed equally to all such market
                                                                                                       Associated Fees, which shows that standard
                                                 The Exchange believes that the                        transaction fees for RUT orders range from $0.15        10 See, e.g., C2 Fees Schedule, Linkage Routing
                                               proposed rule change is consistent with                 per contract to $0.55 per contract.                   Fees.



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                                                                            Federal Register / Vol. 83, No. 201 / Wednesday, October 17, 2018 / Notices                                           52593

                                               participants. While different fees are                     Paper Comments                                        SECURITIES AND EXCHANGE
                                               assessed to different market participants                                                                        COMMISSION
                                               in some circumstances, these different                       • Send paper comments in triplicate
                                                                                                          to Secretary, Securities and Exchange                 [Release No. 34–84402; File No. SR–ISE–
                                               market participants have different                                                                               2018–83]
                                               obligations and different circumstances                    Commission, 100 F Street NE,
                                               as discussed above. For example,                           Washington, DC 20549–1090.                            Self-Regulatory Organizations; Nasdaq
                                               Market Makers have quoting obligations                     All submissions should refer to File                  ISE, LLC; Notice of Filing and
                                               that other market participants do not                      Number SR–CboeBZX–2018–075. This                      Immediate Effectiveness of Proposed
                                               have. Further, the proposed fees                           file number should be included on the                 Rule Change To Amend Certain Maker/
                                               structure for RUT is intended to                                                                                 Taker Fees in Section I of the
                                                                                                          subject line if email is used. To help the
                                               encourage more trading of RUT, which                                                                             Exchanges Schedule of Fees
                                                                                                          Commission process and review your
                                               brings liquidity to the Exchange and
                                               benefits all market participants.                          comments more efficiently, please use                 October 11, 2018.
                                                                                                          only one method. The Commission will                     Pursuant to Section 19(b)(1) of the
                                                  The Exchange also does not believe
                                                                                                          post all comments on the Commission’s                 Securities Exchange Act of 1934
                                               that the proposed rule changes will
                                               impose any burden on intermarket                           internet website (http://www.sec.gov/                 (‘‘Act’’),1 and Rule 19b–4 thereunder,2
                                               competition that is not necessary or                       rules/sro.shtml). Copies of the                       notice is hereby given that on October
                                               appropriate in furtherance of the                          submission, all subsequent                            1, 2018, Nasdaq ISE, LLC (‘‘ISE’’ or
                                               purposes of the Act because the                            amendments, all written statements                    ‘‘Exchange’’) filed with the Securities
                                               proposed RUT fees are in line with                         with respect to the proposed rule                     and Exchange Commission
                                               amounts assessed by other exchanges.                       change that are filed with the                        (‘‘Commission’’) the proposed rule
                                                                                                          Commission, and all written                           change as described in Items I, II, and
                                               C. Self-Regulatory Organization’s                          communications relating to the                        III, below, which Items have been
                                               Statement on Comments on the                               proposed rule change between the                      prepared by the Exchange. The
                                               Proposed Rule Change Received From                         Commission and any person, other than                 Commission is publishing this notice to
                                               Members, Participants, or Others                                                                                 solicit comments on the proposed rule
                                                                                                          those that may be withheld from the
                                                                                                                                                                change from interested persons.
                                                 The Exchange has not solicited, and                      public in accordance with the
                                               does not intend to solicit, comments on                    provisions of 5 U.S.C. 552, will be                   I. Self-Regulatory Organization’s
                                               this proposed rule change. The                             available for website viewing and                     Statement of the Terms of Substance of
                                               Exchange has not received any written                      printing in the Commission’s Public                   the Proposed Rule Change
                                               comments from members or other                             Reference Room, 100 F Street NE,                         The Exchange proposes to amend
                                               interested parties.                                        Washington, DC 20549, on official                     certain maker/taker fees in Section I of
                                               III. Date of Effectiveness of the                          business days between the hours of                    the Exchange’s Schedule of Fees, as
                                               Proposed Rule Change and Timing for                        10:00 a.m. and 3:00 p.m. Copies of the                described further below.
                                               Commission Action                                          filing also will be available for                        The text of the proposed rule change
                                                                                                          inspection and copying at the principal               is available on the Exchange’s website at
                                                  The foregoing rule change has become                    office of the Exchange. All comments                  http://ise.cchwallstreet.com/, at the
                                               effective pursuant to Section 19(b)(3)(A)                                                                        principal office of the Exchange, and at
                                                                                                          received will be posted without change.
                                               of the Act 11 and paragraph (f) of Rule                                                                          the Commission’s Public Reference
                                                                                                          Persons submitting comments are
                                               19b–4 thereunder.12 At any time within                                                                           Room.
                                               60 days of the filing of the proposed rule                 cautioned that we do not redact or edit
                                               change, the Commission summarily may                       personal identifying information from                 II. Self-Regulatory Organization’s
                                               temporarily suspend such rule change if                    comment submissions. You should                       Statement of the Purpose of, and
                                               it appears to the Commission that such                     submit only information that you wish                 Statutory Basis for, the Proposed Rule
                                               action is necessary or appropriate in the                  to make available publicly. All                       Change
                                               public interest, for the protection of                     submissions should refer to File                         In its filing with the Commission, the
                                               investors, or otherwise in furtherance of                  Number SR–CboeBZX–2018–075, and                       Exchange included statements
                                               the purposes of the Act.                                   should be submitted on or before                      concerning the purpose of and basis for
                                                                                                          November 7, 2018.                                     the proposed rule change and discussed
                                               IV. Solicitation of Comments
                                                                                                            For the Commission, by the Division of              any comments it received on the
                                                 Interested persons are invited to                        Trading and Markets, pursuant to delegated            proposed rule change. The text of these
                                               submit written data, views, and                            authority.13                                          statements may be examined at the
                                               arguments concerning the foregoing,                        Eduardo A. Aleman,
                                                                                                                                                                places specified in Item IV below. The
                                               including whether the proposed rule                                                                              Exchange has prepared summaries, set
                                                                                                          Assistant Secretary.
                                               change is consistent with the Act.                                                                               forth in sections A, B, and C below, of
                                               Comments may be submitted by any of                        [FR Doc. 2018–22533 Filed 10–16–18; 8:45 am]          the most significant aspects of such
                                               the following methods:                                     BILLING CODE 8011–01–P                                statements.
                                               Electronic Comments                                                                                              A. Self-Regulatory Organization’s
                                                                                                                                                                Statement of the Purpose of, and
                                                 • Use the Commission’s internet                                                                                Statutory Basis for, the Proposed Rule
                                               comment form (http://www.sec.gov/                                                                                Change
daltland on DSKBBV9HB2PROD with NOTICES




                                               rules/sro.shtml); or
                                                 • Send an email to rule-comments@                                                                              1. Purpose
                                               sec.gov. Please include File Number SR–                                                                             The purpose of the proposed rule
                                               CboeBZX–2018–075 on the subject line.                                                                            change is to amend the Exchange’s
                                                 11 15   U.S.C. 78s(b)(3)(A).                                                                                     1 15   U.S.C. 78s(b)(1).
                                                 12 17   CFR 240.19b–4(f).                                  13 17   CFR 200.30–3(a)(12).                          2 17   CFR 240.19b–4.



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Document Created: 2018-10-17 01:47:19
Document Modified: 2018-10-17 01:47:19
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 Citation83 FR 52591 

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