83 FR 61699 - Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating To the Modification of Certain Routing Fees

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 83, Issue 231 (November 30, 2018)

[Federal Register Volume 83, Number 231 (Friday, November 30, 2018)]
[Notices]
[Pages 61699-61700]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-26002]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-84653; File No. SR-CboeBZX-2018-083]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change Relating 
To the Modification of Certain Routing Fees

November 26, 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 November 13, 2018, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe BZX Exchange, Inc. (the ``Exchange'' or ``BZX'') is filing 
with the Securities and Exchange Commission (``Commission'') a proposed 
rule change to modify certain Routing Fees.
    The text of the proposed rule change is also available on the 
Exchange's website (http://www.cboe.com/AboutCBOE/CBOELegalRegulatoryHome.aspx), at the Exchange's Office of the 
Secretary, 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 aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend its fee schedule to amend pricing 
for orders routed to Cboe EDGA Exchange, Inc., (``EDGA''), which yield 
fee codes AA, BJ, and RA.\3\ Particularly, as of November 1, 2018, EDGA 
implemented pricing changes for transactions that add and remove 
liquidity.\4\ The filing generally proposes that orders that add 
liquidity will be assessed a fee of $0.00300 per share and orders that 
remove liquidity will be provided a rebate of $0.00240 per share. Based 
on the changes in pricing at EDGA, the Exchange proposes the pricing 
changes described below.
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    \3\ The Exchange initially filed the proposed fee changes on 
November 1, 2018 (SR-CboeBZX-2018-080). On business date November 
13, 2018, the Exchange withdrew that filing and submitted this 
filing.
    \4\ See SR-CboeEDGA-2018-017.
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    First, the Exchange notes that orders routed to EDGA using ALLB 
routing strategy (which yield fee code AA) and orders routed to EDGA 
using a TRIM or TRIM2 routing strategy (which yield fee code BJ) are 
currently assessed $0.00030 per share. The Exchange proposes to 
eliminate this fee and instead provide a rebate of $0.00240 per share 
for these orders. Next, the Exchange notes that orders routed to EDGA 
that add liquidity (which yield fee code RA) are assessed $0.00030 per 
share. The Exchange proposes to increase the rate from $0.00030 per 
share to $0.00300 per share.
2. Statutory Basis
    The Exchange also believes the proposed rule change is consistent 
with Section 6(b)(4) of the Act, which requires that Exchange rules 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and other persons using its facilities.
    The Exchange believes the proposed changes are reasonable because 
they reflect a pass-through of the pricing changes by EDGA described 
above. The Exchange further believes the proposed fee change is non-
discriminatory because it applies uniformly to all Members. The 
Exchange lastly notes that routing through the Exchange is voluntary 
and that it operates in a highly competitive market in which market 
participants can readily direct order flow to competing venues or 
providers of routing services if they deem fee levels to be excessive.

[[Page 61700]]

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes the 
proposed routing fee changes will not impose an undue burden on 
competition because the Exchange will uniformly assess the affected 
routing fees on all Members. Additionally, Members may opt to disfavor 
the Exchange's pricing if they believe that alternatives offer them 
better value or if they view the proposed fee as excessive. The 
Exchange also notes the proposed changes to the EDGA-related routing 
fees are meant to pass through the fees and rebates associated with 
executing orders on that market, and is therefore not designed to have 
any significant impact on competition. Further, excessive fees for 
participation would serve to impair an exchange's ability to compete 
for order flow and members rather than burdening competition.

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 \5\ and paragraph (f) of Rule 19b-4 \6\ 
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.
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    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
File Number SR-CboeBZX-2018-083 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-2018-083. 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-2018-083 and should be submitted 
on or before December 21, 2018.
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    \7\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-26002 Filed 11-29-18; 8:45 am]
 BILLING CODE 8011-01-P