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Federal Register / Vol. 86, No. 20 / Tuesday, February 2, 2021 / Notices
jbell on DSKJLSW7X2PROD with NOTICES

available information,4 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.
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; and Fee code MX, which is appended to Members orders routed to NYSE
American using the SLIM 5 routing strategy and assesses a charge of $0.00020 per contract.
The Exchange has observed a minimal amount of volume in recent months in orders yielding fee codes 8 or MX. In particular, over the last six months the Exchange observed that orders yielding fee code MX accounted for approximately only 0.12% of all routed order volume, and no orders yielding fee code 8 have been submitted since 2014. The Exchange believes that, because so few Users elect to route their orders with specifications to which fee codes 8 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 and MX in the Fee Schedule.
4 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/.
5 The SLIM routing strategy is a routing strategy in which an order checks the System for available shares if so instructed by the entering User and then is sent to destinations on the applicable System routing table. See Rule 11.13b3G; 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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In light of the proposed fee code deletions, the Exchange also proposes to update the description to which fee code X is applicable. Currently, the description for orders yielding fee code X applies to Members orders routed to a displayed market to remove liquidity using Parallel D, Parallel 2D, ROUT, ROUX or Post to Away routing strategy.
Fee code X assesses a charge of $0.0030
per contract. Essentially, fee code X is designed to apply, and currently applies, to all other routed orders that are not otherwise specified under other fee codes in the Fee Schedule. However, as currently written, the description of orders that yield fee code X would not encompass those orders that currently yield fee codes 8 and MX. Therefore, the proposed rule change updates the description of orders that yield fee code X to Routed. The Exchange notes that the corresponding fee will remain unchanged and is the standard rate routing fee assessed pursuant to the Standard Rates section of the Fee Schedule. As a result of the proposed description, Members will continue to be able to choose to route their orders with the same specifications to which fee codes 8 and MX currently apply such orders will simply be assessed the fee currently in place for orders yielding fee code X i.e., routed orders not otherwise specified under other fee codes in the Fee Schedule. The Exchange notes that the proposed description for fee code X does not alter any of the routed orders to which fee code X currently applies. The Exchange also notes that the proposed description for fee code X is consistent with the description associated with corresponding fee code X on the Exchanges affiliated equities exchanges, Cboe EDGX Exchange, Inc. EDGX
and Cboe EDGA Exchange Inc.
EDGA.
2. Statutory Basis The Exchange believes that the proposed rule change is consistent with the objectives of Section 6 of the Act,6
in general, and furthers the objectives of Section 6b4,7 in particular, as it is designed to provide for the equitable allocation of reasonable dues, fees and other charges among its Members and issuers and other persons using its facilities. The Exchange also believes that the proposed rule change is consistent with the objectives of Section 6b5 8 requirements that the rules of an exchange be designed to prevent fraudulent and manipulative acts and 6 15

U.S.C. 78f.
U.S.C. 78fb4.
8 15 U.S.C. 78f.b5.
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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, and, particularly, is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers.
The Exchange believes the proposed rule changes are reasonable, equitable and not unfairly discriminatory. The Exchange first notes that routing through the Exchange is optional. The Exchange believes the proposed rule change to remove fee codes 8 and MX
is reasonable as the Exchange has observed a minimal amount of volume in orders yielding these fee codes and, therefore, the continuation of these fee codes does not warrant the infrastructure and ongoing Systems maintenance required to support separate fee codes for specific routed orders. As such, the Exchange also believes that is reasonable and equitable to assess routed orders which meet the specifications to which fee codes 8 and MX are currently applicable the slightly higher standard routing fee currently in place for all other routed orders that are not otherwise specified under other fee codes in the Fee Schedulevia fee code X, as amended. The Exchange believes it is reasonable to update the description for orders that yield fee code X in a manner that reflects the intent of fee code X, which is to apply to routed orders not otherwise specified under other fees codes in the Fee Schedule, and will thus apply to routed orders that currently yield fee codes 8 and MX. The Exchange believes that the proposed updated description is reasonable because it does not alter any of the routed orders to which fee code X
currently applies and will allow Members to continue to be able to choose to route their orders with the same specifications to which fee codes 8 and MX currently apply. The Exchange again notes that the proposed description for fee code X is consistent with the description associated with corresponding fee code X on the Exchanges affiliated equities exchanges.
The Exchange believes that the proposed rule change is equitable and not unfairly discriminatory because Members will continue to have the option to elect to route their orders in the same manner i.e., routed to NYSE
American that add liquidity and routed to NYSE American using the SLIM

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