[Federal Register Volume 85, Number 49 (Thursday, March 12, 2020)]
[Notices]
[Pages 14513-14515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05025]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-88341; File No. SR-CBOE-2020-006]
Self-Regulatory Organizations; Cboe Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of a Proposed Rule Change Relating
To Make Certain Non-Substantive Changes To Clean Up Its Fees Schedule
March 6, 2020.
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 February 26, 2020, Cboe Exchange, Inc. (the ``Exchange'' or
``Cboe Options'') 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
Exchange filed the proposal as a ``non-controversial'' proposed rule
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule
19b-4(f)(6) thereunder.\4\ 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)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe Exchange, Inc. (the ``Exchange'' or ``Cboe Options'') proposes
to make certain non-substantive changes to clean up its Fees Schedule.
The text of the proposed rule change is provided in Exhibit 5.
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 Exchanges proposes to make certain nonsubstantive change to its
Fees Schedule in connection with RLG, RLV, RUI and UKXM related fees,
in connection with the Livevol Fees table, and in connection with rule
references to Cboe Options Rules.
RLG, RLV, RUI and UKXM
Currently, RLG, RLV, RUI and UKXM sit in line items in the Fees
Schedule along with other products (e.g., VIX, OEX, XEO, and/or RUT)
which have corresponding fee rates that are different than that of RLG,
RLV, RUI and UKXM. Footnote 40 is appended to RLG, RLV, RUI and UKXM
within these line items and states only that it is $0.00 for
transactions in RLG, RLV, RUI and UKXM. The Exchange believes that
footnote 40 is no longer necessary and
[[Page 14514]]
the manner in which it is currently appended to RLG, RLV, RUI and UKXM
within certain line items along with other products that are instead
assessed a fee is potentially confusing to market participants. As
such, the Exchange proposes to amend the Fees Schedule to parse out
RLG, RLV, RUI and UKXM as separate line items with a corresponding
charge of $0.00 and to remove footnote 40. The Exchange believes that
RLG, RLV, RUI and UKXM as a separate line item apart from other
products that are currently assessed a fee will provide additional
clarity and mitigate any confusion regarding the specific fee amounts
charged to the corresponding products. The Exchange notes this will not
amend the fees for any of these products.
Livevol Fees Table
The Livevol Fees table shows the fees charged for receipt of
historical Open-Close data per different packages (i.e., for one Cboe
security, for all Cboe securities, and for all Cboe securities as a
daily download) for different periods of time. Currently, the fees are
listed for some data products on a per month basis, while the fees for
other data products are listed on a per year basis. For example, the
Livevol Fees table shows that for downloads of a Cboe security for one
to nine years, the monthly rate is $4.50, while it shows that for
downloads of a Cboe security for ten or more years, the annual rate is
$270.00. The Exchange believes that it is potentially confusing to
investors to display the rates for the same download in different
increments of time. Therefore, the Exchange now proposes to amend the
Livevol Fees table to make uniform the rates per increment of time and
display all rates as a monthly rate. The Exchange notes that this will
not change the rates or the timing in which these fees currently apply
and are charged to market participants. For example, the proposed
change will amend the download per Cboe security for ten or more years
of historical data at $270.00 to instead display the price per month,
which would be $2.25 (i.e., $2.25 x 12 months x 10 years). The proposed
rule change is designed to present market participants with more
precise rates and time frames for which they may currently request
historical Open-Close data (i.e., a market participant may currently
request historical data for 10.5 years and the Exchange would
accordingly charge them the applicable rate broken down for 126
months).
Rule Reference Updates
In connection with a recent technology migration,\5\ Cboe Options
updated and reorganized its entire Rulebook. In light of the
reorganized Rulebook, the Exchange proposes to update cross-references
to Cboe Options Rules within the Fees Schedule that have been relocated
in the Cboe Options Rulebook. This includes updates to the rule
references in the Marketing Fee table, the Sponsored User Fees table,
the Sales Value Fee table, the Stock Portion of Stock-Option Strategy
Orders table, the Regulatory Fees table, the Miscellaneous table, and
in footnotes 15, 30, 36, 41 and 46. The Exchange notes that in the
Stock Portion of Stock-Option Strategy Orders table, particularly, the
proposed change removes the reference to stock-option orders executed
via the splitting mechanism which is used for certain market orders
pursuant to (prior) Interpretation .06(d) of Rule 6.53C. Pursuant to a
migration-related rule filing,\6\ Interpretation .06(d) provided the
Exchange with authority to determine on a class-by-class basis to
permit unexecuted option legs of stock-option market orders to leg
following a COA, and that the Exchange did not intend to permit this
following the technology migration. As such, the Exchange no longer
permits this and the proposed change merely updates the Fees Schedule
to accurately reflect this rule change.
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\5\ In 2016, the Exchange's parent company, Cboe Global Markets,
Inc. (``Cboe Global''), which is also the parent company of Cboe C2
Exchange, Inc. (``C2''), acquired Cboe EDGA Exchange, Inc.
(``EDGA''), Cboe EDGX Exchange, Inc. (``EDGX'' or ``EDGX Options''),
Cboe BZX Exchange, Inc. (``BZX'' or ``BZX Options''), and Cboe BYX
Exchange, Inc. (``BYX'' and, together with Cboe Options, C2, EDGX,
EDGA, and BZX, the ``Cboe Affiliated Exchanges''). On October 7,
2019, Cboe Options migrated its trading platform to the same system
used by the Cboe Affiliated Exchanges.
\6\ See Securities Exchange Act Release No. 86772 (August 27,
2019), 84 FR 46069 (September 3, 2019) (SR-CBOE-2019-042).
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2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Securities Exchange Act of 1934 (the ``Act'') and the rules and
regulations thereunder applicable to the Exchange and, in particular,
the requirements of Section 6(b) of the Act.\7\ Specifically, the
Exchange believes the proposed rule change is consistent with the
Section 6(b)(5) \8\ requirements that the rules of an exchange be
designed to prevent fraudulent and manipulative acts and practices, to
promote just and equitable principles of trade, to foster cooperation
and coordination with persons engaged in regulating, clearing,
settling, processing information with respect to, and 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. Additionally,
the Exchange believes the proposed rule change is consistent with
Section 6(b)(4) of the Act,\9\ which requires that Exchange rules
provide for the equitable allocation of reasonable dues, fees, and
other charges among its Trading Permit Holders and other persons using
its facilities.
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\7\ 15 U.S.C. 78f(b).
\8\ 15 U.S.C. 78f(b)(5).
\9\ 15 U.S.C. 78f(b)(4).
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The Exchange believes that the proposed changes to the Fees
Schedule do not change any fees charged for RLG, RLV, RUI or UKXM,
historical Open-Close data, or within any of the tables in which the
proposed rule change updates a rule reference to Cboe Options Rules,
and thus, those fees will continue to be reasonable and equitable, and
uniformly applied to all market participants. The Exchange believes the
proposed rule changes remove impediments to and perfect the mechanism
of a free and open market and national market system as they add
clarity, mitigate any potential confusion in connection with the
presentation of these fees or information in connection with these
fees, and facilitate better understanding of the Fees Schedule for all
market participants, which ultimately protects investors.
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 that is not necessary or appropriate
in furtherance of the purposes of the Act. As indicated above, the
proposed changes to the Fees Schedule do not change any of the current
fees or the manner in which they currently apply to market
participants. The proposed changes are not competitive in nature and
are merely intended to clean up the Fees Schedule in order to provide
additional clarity and facilitate better understanding of the Fees
Schedule for all market participants.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on the
proposed rule change.
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III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
A. Significantly affect the protection of investors or the public
interest;
B. impose any significant burden on competition; and
C. 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) \11\ 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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\10\ 15 U.S.C. 78s(b)(3)(A).
\11\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
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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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-CBOE-2020-006 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-CBOE-2020-006. 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. 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-CBOE-2020-006 and should be
submitted on or before April 2, 2020.
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\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\12\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-05025 Filed 3-11-20; 8:45 am]
BILLING CODE 8011-01-P