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Federal Register / Vol. 86, No. 20 / Tuesday, February 2, 2021 / Notices
Commission the Commission the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. 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 EDGA Exchange, Inc. the Exchange or EDGA is filing with the Securities and Exchange Commission Commission a proposed rule change to amend the fee schedule applicable to Members and non-Members of the Exchange pursuant to EDGA Rules 15.1a and c. Changes to the fee schedule pursuant to this proposal are effective upon filing. The text of the proposed rule change is provided in Exhibit 5.
The text of the proposed rule change is also available on the Exchanges website http markets.cboe.com/us/
equities/regulation/rule_filings/edga/, at the Exchanges Office of the Secretary, and at the Commissions Public Reference Room.
II. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization 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 those 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.

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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 its fee schedule by 1 eliminating certain routing fee codes and 2 amending an Add/Remove Volume Tier.4
The Exchange first notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues if they deem fee levels at a particular venue to be excessive or 4 The Exchange initially filed the proposed fee changes January 4, 2021 SRCboeEDGA2021
001. On January 13, 2021, the Exchange withdrew that filing and submitted this proposal.

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incentives to be insufficient. More specifically, the Exchange is only one of 16 registered equities exchanges, as well as a number of alternative trading systems and other off-exchange venues that do not have similar self-regulatory responsibilities under the Exchange Act, to which market participants may direct their order flow. Based on publicly available information,5 no single registered equities exchange has more than 16% of the market share. Thus, in such a low-concentrated and highly competitive market, no single equities exchange possesses significant pricing power in the execution of order flow.
The Exchange believes that the evershifting market share among the exchanges from month to month demonstrates that market participants can shift order flow or discontinue to reduce use of certain categories of products, in response to fee changes.
Accordingly, competitive forces constrain the Exchanges transaction fees, and market participants can readily trade on competing venues if they deem pricing levels at those other venues to be more favorable.
Proposal To Remove Certain Routing Fee Codes The Exchange assesses fees in connection with orders routed away to various exchanges. As a result of minimal use in the last months, the Exchange proposes to eliminate the following routing fee codes currently under the Fee Codes and Associated Fees section of the Fee Schedule:
Fee code 8, which is appended to Members orders routed to NYSE
American that adds liquidity and assesses a charge of $0.00020 per contract for orders in securities priced at or above $1.00 and assesses no charge for orders in securities priced below $1.00;
Fee code K, which is appended to Members orders routed to PSX using the ROUC 6 routing strategy and assesses a charge of $0.00290 per contract for orders in securities priced at or above $1.00 and assesses a charge of 30% of the dollar value per contract for orders in securities priced below $1.00; and Fee code MX, which is appended to Members orders routed to NYSE
5 See Cboe Global Markets, U.S. Equities Market Volume Summary, Month-to-Date December 29, 2020, available at https markets.cboe.com/us/
equities/market_statistics/.
6 The ROUC routing strategy is a routing strategy under which an order checks the System for available shares and then is sent to destinations on the System routing table, Nasdaq OMX BX, and NYSE. See Rule 11.11g1; see also Cboe Routing Strategies, FIX/BOE Routing Tags and Instructions, available at: https cdn.cboe.com/resources/
features/Cboe_USE_RoutingStrategies.pdf.

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American using the ROBB, ROCO 7 or ROUC routing strategy and assesses a charge of $0.00020 per contract for orders in securities priced at or above $1.00 and assesses no charge for orders in securities priced below $1.00.
The Exchange has observed a minimal amount of volume in recent months in orders yielding fee codes 8, K or MX. In particular, over the last six months the Exchange observed that orders yielding fee code MX accounted for approximately only 0.80% of all routed order volume, orders yielding fee code K accounted for approximately only 0.01% of all routed order volume, and there was only one contract executed from an order yielding fee code 8. The Exchange believes that, because so few Users elect to route their orders with specifications to which fee codes 8, K or MX, the current demand does not warrant the infrastructure and ongoing Systems maintenance required to support these separate fee codes.
Therefore, the Exchange now proposes to delete fee codes 8, K and MX in the Fee Schedule. The Exchange notes that Users will continue to be able to choose to route their orders with the same specifications to which fee codes 8, K
and MX currently applysuch orders will simply be assessed the fees currently in place for routed orders generally.8 That is, if any of the routed orders to which fee code K or MX
currently apply are submitted in the preor post-market sessions that remove liquidity,9 then fee code 7 will apply, which is appended to Members routed orders in the preor post-market sessions and assesses a charge of $0.00300 per contract for orders in securities priced at or above $1.00 and assesses a charge of 30% of the dollar value per contract for orders in securities priced below $1.00. Fee code X will be appended to routed orders not 7 The ROBB and ROCO routing strategies are routing strategies which check the System for available shares and then are sent to destinations on the System routing table. See Rule 11.11g3;
see also Cboe Routing Strategies, FIX/BOE Routing Tags and Instructions, available at: https
cdn.cboe.com/resources/features/Cboe_USE_
RoutingStrategies.pdf.
8 The Exchange notes that there are other fee codes that apply to certain other routing specifications, however, those routed orders not otherwise specified in such other routing fee code descriptions yield the general routing fee codes 7
or X.
9 Fee code 7 is currently appended to all routed orders in the preor post-market session that remove liquidity. The proposed rule change updates the description associated with fee code 7
to clarify in the description that such orders remove liquidity. This update does not alter the orders to which fee code 7 currently applies but merely makes it clear in the Fee Schedule that fee code 7
applies to qualifying routed orders that remove liquidity.

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