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Federal Register / Vol. 86, No. 25 / Tuesday, February 9, 2021 / Notices Act,1 and Rule 19b4 thereunder,2
notice is hereby given that on January 25, 2021, 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 and II below, which Items have been prepared by the Exchange. The Exchange filed the proposal as a noncontroversial proposed rule change pursuant to Section 19b3Aiii of the Act 3 and Rule 19b4f6
thereunder.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.
I. Self-Regulatory Organizations Statement of the Terms of Substance of the Proposed Rule Change Cboe Exchange, Inc. Cboe Options or the Exchange is filing with the Securities and Exchange Commission the Commission a proposed rule change to establish a policy relating to billing errors. The Exchange has designated this proposal as noncontroversial and provided the Commission with the notice required by Rule 19b4f6iii under the Act.5
The text of the proposed rule change is provided in Exhibit 5. The text of the proposed rule change is available on the Exchanges website at http
markets.cboe.com/, at the Exchanges principal office and at the Public Reference Room of the Commission.
II. Self-Regulatory Organizations 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.

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A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend Footnote 7 of its fees schedule which 1 15

U.S.C. 78sb1.
CFR 240.19b4.
3 15 U.S.C. 78sb3Aiii.
4 17 CFR 240.19b4f6.
5 17 CFR 240.19b4f6iii.
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relates to billing errors and fee disputes.
Footnote 7 currently provides that that any potential billing errors relating to fees assessed by Cboe Options must be brought to the attention of Cboe Options Accounting Department within three months from the invoice date.
Additionally, all fees assessed shall be deemed final and non-refundable after three months from the invoice date.
However, Footnote 7 further provides that the Exchange is not precluded from assessing fees more than three months after they were incurred if those fees were required to be paid pursuant to the Cboe Options Fee Schedule in effect at the time the fees were incurred. The Exchange proposes to eliminate the current language in Footnote 7 of the fees schedule and replace it with language recently adopted by its affiliated exchanges.6 Particularly, the Exchange proposes to provide: All fees and rebates assessed prior to the three full calendar months before the month in which the Exchange becomes aware of a billing error shall be considered final. Any dispute concerning fees or rebates billed by the Exchange must be submitted to the Exchange in writing and must be accompanied by supporting documentation.
The proposed language would result in all fees and rebates assessed prior to the three full calendar months before the month in which the Exchange becomes aware of a billing error to be considered final. Particularly, the Exchange will resolve an error by crediting or debiting Trading Permit Holders TPHs and Non-TPHs based on the fees or rebates that should have been applied in the three full calendar months preceding the month in which the Exchange became aware of the error, including to all impacted transactions that occurred during those months.7 The Exchange will apply the three month look back regardless of whether the error was discovered by the Exchange or by a TPH or Non-TPH that submitted a fee dispute to the Exchange. The Exchange will continue to provide all disputes concerning fees and rebates assessed by the Exchange would have to 6 See SRCboeBZX2020094; SR-CboeBYX
2020034; SR-CboeEDGA2020032; SRCboeEDGX2020064.
7 For example, if the Exchange becomes aware of a transaction fee billing error on January 4, 2021, the Exchange will resolve the error by crediting or debiting Members based on the fees or rebates that should have been applied to any impacted transactions during October, November and December 2020. The Exchange notes that because it bills in arrears, the Exchange would be able to correct the error in advance of issuing the January 2021 invoice and therefore, transactions impacted through the date of discovery in this example, January 4, 2021 and thereafter, would be billed correctly.

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be submitted to the Exchange in writing and accompanied by supporting documentation.
The Exchange notes that the proposed language continues to encourage TPHs and Non-TPHs to promptly review their Exchange invoices so that any disputed charges can be addressed in a timely manner. The Exchange notes that it provides TPHs with both daily and monthly fee reports and thus believes they should be aware of any potential billing errors within three months.
Requiring that TPHs and Non-TPHs submit disputes in writing and provide supporting documentation encourages them to promptly review their invoices so that any disputed charges can be addressed in a timely manner while the information and data underlying those charges e.g., applicable fees and order information is still easily and readily available. This practice will avoid issues that may arise when TPHs or Non-TPHs do not dispute an invoice in a timely manner and will conserve Exchange resources that would have to be expended to resolve untimely billing disputes. As such, the requirement continues to alleviate administrative burdens related to billing disputes, which could divert staff resources away from the Exchanges regulatory and business purposes. The proposed rule change to eliminate the requirement that the Exchange assess fees beyond three months if they were required to be assessed pursuant to the fees schedule at the time incurred i.e., all fees and rebates would be final after three months regardless of how far back a billing error occurred would provide both the Exchange and TPHs and NonTPHs finality and the ability to close their books after a known period of time.
The Exchange notes that a number of exchanges have explicitly stated that they consider all fees to be final after a similar period of time.8 Additionally, several other exchanges have adopted similar provisions in their rules that provide for a process for their members and non-members to submit fee disputes.9 Moreover, the proposed language is identical to the language recently adopted on the Exchanges 8 See e.g. Securities Exchange Act Release No.
87650 December 3, 2019, 84 FR 67304 December 9, 2019 SRNYSECHX2019024; Securities Exchange Act Release No. 84430 October 16, 2018, 83 FR 53347 October 22, 2018 SRNYSENAT
201823; and Securities Exchange Act Release No.
79060 October 6, 2016, 81 FR 70716 October 13, 2016 SRISEGemini201611 .
9 See e.g., MEMX LLC, Rule 15.3, IEX Rule 15.120, Nasdaq Rule Equity 7, Section 70, Nasdaq BX Rule Equity 7, Section 111, and Nasdaq PHLX
Rule Equity 7, Section 2.

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