[Federal Register Volume 88, Number 136 (Tuesday, July 18, 2023)]
[Notices]
[Pages 45945-45947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15125]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-97881; File No. SR-CboeEDGA-2023-009]


Self-Regulatory Organizations; Cboe EDGA Exchange, Inc.; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Its Fee Schedule

July 12, 2023.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on June 30, 2023, Cboe EDGA Exchange, Inc. (``Exchange'' or ``EDGX'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Cboe EDGA Exchange, Inc. (the ``Exchange'' or ``EDGA'') proposes to 
amend its Fee 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://markets.cboe.com/us/equities/regulation/rule_filings/edga/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

[[Page 45946]]

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 applicable to its 
equities trading platform (``EDGA Equities'') by amending the 
definition of ADV and the definition of the Russell Reconstitution Day. 
The Exchange proposes to implement these changes effective June 22, 
2023.\3\
---------------------------------------------------------------------------

    \3\ The Exchange initially filed the proposed fee change on June 
22, 2023 (SR-CboeEDGA-2023-008). On June 30, 2023, the Exchange 
withdrew that proposal and submitted this proposal.
---------------------------------------------------------------------------

    The ``definitions'' section of the Exchange's Fee Schedule defines 
various terms used throughout the Fee Schedule. As explained under the 
definitions of ADAV, ADV, and TCV,\4\ the Exchange currently excludes 
the Russell Reconstitution Day from the calculation of ADAV, ADV, and 
TCV, each of which are calculated on a monthly basis.\5\ The Russell 
Reconstitution Day is defined in the Fee Schedule as ``the last Friday 
in June.'' \6\ While generally the Russell Reconstitution Day does 
occur on the last Friday in June, in months [sic] where there are five 
Fridays in June the Russell Reconstitution Day instead falls on the 
fourth Friday in June. The Exchange proposes to amend the definition of 
Russell Reconstitution Day to ``the fourth Friday in June'' \7\ in 
order to provide a more accurate description of the date which will not 
be included in the calculation of ADAV, ADV, and TCV to its Members.\8\
---------------------------------------------------------------------------

    \4\ ``ADAV'' means average daily added volume calculated as the 
number of shares added per day and ``ADV'' means daily volume 
calculated as the number of shares added to, removed from, or routed 
by, the Exchange, or any combination or subset thereof, per day. 
ADAV and ADV are calculated on a monthly basis. ``TCV'' means total 
consolidated volume as the volume reported by all exchanges and 
trade reporting facilities to a consolidated transaction reporting 
plan for the month for which the fees apply. The Exchange notes that 
it intends to amend the definition of ADV, discussed infra.
    \5\ The Russell Reconstitution Day is generally characterized by 
high trading volumes, much of which are derived from market 
participants who are not generally as active entering the market to 
rebalance their holdings in-line with the annual rebalancing of the 
Russell indices. The Exchange, along with other competing exchanges, 
excludes the Russell Reconstitution Day from certain volume 
calculations as the high trading volumes can significantly impact 
trading and quoting calculations.
    \6\ See EDGA Equities Fee Schedule, Definitions.
    \7\ See Russell U.S. Equity Indices Construction and 
Methodology, available at https://research.ftserussell.com/products/downloads/Russell-US-indexes.pdf (last accessed June 21, 2023).
    \8\ See Rule 1.5(n) (``Member''). The term ``Member'' shall mean 
any registered broker or dealer that has been admitted to membership 
in the Exchange. A Member will have the status of a ``member'' of 
the Exchange as that term is defined in Section 3(a)(3) of the Act. 
Membership may be granted to a sole proprietor, partnership, 
corporation, limited liability company or other organization which 
is a registered broker or dealer pursuant to Section 15 of the Act, 
and which has been approved by the Exchange.
---------------------------------------------------------------------------

    The Exchange also proposes to amend the definition of ADV in order 
to correct an inadvertent removal of the word ``average''. The proposed 
revised definition of ADV would read ``average daily volume calculated 
as the number of shares added to, removed from, or routed by, the 
Exchange, or any combination or subset thereof, per day.'' This 
proposed definition will align the definition of ADV on the Exchange 
with the definition of ADV on the Exchange's affiliates.\9\ The 
Exchange is not proposing to make any other changes to the Definitions 
in its Fee Schedule and will announce the change via a Trade Desk 
notice to Members.
---------------------------------------------------------------------------

    \9\ See, e.g., EDGX Equities Fee Schedule, Definitions.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the Act and the rules and regulations thereunder applicable to the 
Exchange and, in particular, the requirements of Section 6(b) of the 
Act.\10\ Specifically, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \11\ 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 the Section 6(b)(5) \12\ requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
customers, issuers, brokers, or dealers as well as Section 6(b)(4) \13\ 
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.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
    \12\ Id.
    \13\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    In particular, the Exchange believes its proposal to amend the 
definition of the ``Russell Reconstitution Day'' is not designed to 
permit unfair discrimination between customer, issuers, brokers, or 
dealers and is designed to provide for the equitable allocation of 
fees. Specifically, the proposal is intended only to add clarity to the 
Exchange's Fee Schedule by providing Members with additional certainty 
as to their level of rebates and costs for trading during the month of 
June and involves no substantive change. Further, the Exchange's 
proposal to amend the definition of ADV is intended to correct an 
inadvertent deletion of the word ``average'' and align the definition 
of ADV with the definition found on the Exchange's affiliates. 
Additionally, the proposed changes promote just and equitable 
principles of trade and are designed to remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system as they provides transparency to Members regarding how ADV is 
calculated and which date in the month of June will not be included in 
the calculation of ADAV, ADV, and TCV.

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. Rather, as discussed above, 
the Exchange believes that the proposed changes would encourage the 
submission of additional order flow to a public exchange, thereby 
promoting market depth, execution incentives and enhanced execution 
opportunities, as well as price discovery and transparency for all 
Members. As a result, the Exchange believes that the proposed changes 
further the Commission's goal in adopting Regulation NMS of fostering 
competition among orders, which promotes ``more efficient pricing of

[[Page 45947]]

individual stocks for all types of orders, large and small.''
    The Exchange believes the proposed rule changes do not impose any 
burden on intramarket competition that is not necessary or appropriate 
in furtherance of the purposes of the Act. Specifically, the Exchange 
does not believe that its proposal to revise the definitions of ``ADV'' 
and ``Russell Reconstitution Day'' will have any impact on competition 
as the changes are only intended to add clarity to the Exchange's Fee 
Schedule and involve no substantive change.
    Next, the Exchange believes the proposed rule changes does not 
impose any burden on intermarket competition that is not necessary or 
appropriate in furtherance of the purposes of the Act. As previously 
discussed, the Exchange operates in a highly competitive market. 
Members have numerous alternative venues that they may participate on 
and direct their order flow, including other equities exchanges, off-
exchange venues, and alternative trading systems. Additionally, the 
Exchange represents a small percentage of the overall market. By 
providing Members with a greater level of certainty as to how their 
volume is calculated and to which date in the month of June will be 
excluded from the calculation of ADAV, ADV, and TCV, the Exchange is 
providing additional certainty as to the level of rebates and costs for 
trading during the month of the Russell reconstitution, which could 
promote competition between the Exchange and other execution venues. 
Accordingly, the Exchange does not believe its proposed fee change 
imposes any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

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.

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 \14\ and paragraph (f) of Rule 19b-4 \15\ 
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.
---------------------------------------------------------------------------

    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 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 (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeEDGA-2023-009 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-CboeEDGA-2023-009. 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 (https://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 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeEDGA-2023-009 and should 
be submitted on or before August 8, 2023.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\16\
---------------------------------------------------------------------------

    \16\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Matthew DeLesDernier,
Deputy Secretary.
[FR Doc. 2023-15125 Filed 7-17-23; 8:45 am]
BILLING CODE 8011-01-P


