Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
Cboe EDGA Exchange, Inc. (“EDGA” or the “Exchange”) is filing with the Securities and Exchange Commission (the “Commission”) a proposed rule change to amend the fee schedule applicable to the EDGA equities trading platform (“EDGA Equities”) as it relates to pricing for the use of the ROBB and ROCO routing strategies. The text of the proposed rule change is attached [sic] as Exhibit 5.
The text of the proposed rule change is also available on the Exchange's website (
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.
The purpose of the proposed rule change is to amend the EDGA Equities fee schedule to change the pricing applicable to orders routed using the ROBB and ROCO routing strategies in connection with planned changes to the System routing table.
In recognition of the fact that NYSE American and NYSE National can be accessed at a low cost today, for securities priced at or above $1.00, the Exchange proposes to provide a fee to orders routed to NYSE American using the ROBB or ROCO routing strategies and a rebate for orders routed to NYSE National using the ROBB or ROCO routing strategies. Specifically, the Exchange proposes to add ROBB and ROCO to the list of routing strategies that yield fee code NX, which relates to orders routed to NYSE National, and to the list of routing strategies that yield fee code MX, which relates to orders routed to NYSE American. As proposed, orders routed to NYSE National using the ROBB or ROCO routing strategies would be provided a rebate of $0.00200 per share in securities priced at or above $1.00, and no charge or rebate would be applied for securities priced below $1.00. Orders routed to NYSE American using the ROBB or ROCO routing strategies would be assessed a fee of $0.00020, and no charge or rebate would be applied for securities prices below $1.00. The fee and rebate are consistent with those currently offered for orders routed to NYSE National and NYSE American using a similar low cost routing strategy, ROUC, yielding fee code NX and MX, respectively.
In addition to this, the Exchange proposes to reduce the per share rebate [sic] for orders routed to Cboe EDGX Exchange, Inc. (“EDGX”) and to reduce the per share fee [sic] assessed for orders routed to EDGX that add liquidity, including pre- and post-market orders. Currently, the Exchange assesses a fee of $0.0030 per share for orders routed to EDGX (yielding fee code I) in securities priced at or above $1.00. The Exchange also currently provides a standard rebate of $0.0027 per share for orders routed to EDGX that add liquidity, including pre- and post-market orders, (yielding fee code P) in securities priced at or above $1.00. The Exchange now proposes to reduce the fee assessed for orders routed to EDGX (yielding fee code I) in securities priced at or above $1.00 from $0.0030 to $0.00265. With respect to orders routed to EDGX that add liquidity, including pre- and post-market orders, (yielding fee code P) in securities priced at or above $1.00, the Exchange proposes to reduce the per share rebate from $0.0027 to $0.0017.
The Exchange believes that the proposed rule change is consistent with Section 6 of the Act,
The Exchange believes that it is reasonable and equitable to begin rebating orders routed to NYSE National using the ROBB and ROCO routing strategies. As mentioned previously, the Exchange added these exchanges to its list of low cost protected market centers, and wishes to provide the benefit of the rebate or lower fee provided by those markets to EDGA members using the ROBB and ROCO routing strategies. The Exchange currently offers such incentives when routing to those markets using another low cost routing strategy, ROUC. As is the case for orders routed via the ROUC routing strategy to NYSE American or NYSE National, the Exchange believes the proposed fees and rebates applicable to the ROBB and ROCO routing strategies to these venues generally reflect the current transaction fees and rebates available for accessing liquidity on those markets.
NYSE National currently provides a rebate of $0.00200 per share in securities priced at or above $1.00 for members that achieve their taking tier.
In addition to this, the Exchange believes that the proposed routing fee changes are equitable and not unfairly discriminatory as the proposed rebate would apply equally to all Members that use the Exchange to route orders using the associated routing strategies. The proposed fees are designed to reflect the fees charged and rebates offered by certain away trading centers that are accessed by Exchange routing strategies, and are being made in conjunction with changes to the System routing table designed to provide Members with low cost executions for their routable order flow. Furthermore, if Members do not favor the proposed pricing, they can send their routable orders directly to away markets instead of using routing functionality provided by the Exchange. Routing through the Exchange is voluntary, and the Exchange operates in a competitive environment where market participants can readily direct order flow to competing venues or providers of routing services if they deem fee levels to be excessive.
The Exchange also believes that its proposal to reduce rates for orders routed to EDGX is reasonable because Members will pay lower transaction fees for such orders. Additionally, the Exchange notes that the proposed fee is lower than transaction fees assessed on other Exchanges.
Finally, the Exchange believes the proposed reduced rebates for orders routed to EDGX that add liquidity (including pre- and post-market orders) is reasonable, equitable and not unfairly discriminatory because Members will still receive rebates for such orders, albeit at a lower amount. The Exchange also believes the proposed reduction of rebates for such orders is reasonable because the Exchange must balance the revenue received for orders that add liquidity (and as described above, the Exchange is reducing the rates assessed for orders routed to EDGX). Rebates for orders that add liquidity incentivize members to bring additional order flow through the Exchange, thereby promoting price discovery and enhancing order execution opportunities for Members.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. The proposed routing fee changes are designed to reflect changes being made to the System routing table used to determine where to send certain routable orders, and generally provide better pricing to Members for orders routed to low cost protected market centers using the Exchange's routing strategies. The Exchange notes that the use of available routing strategies is optional for all Members. Also, the proposed rates and rebates would apply uniformly to all Members, and members may opt to disfavor the Exchange's pricing if they believe that alternatives offer them better value. Accordingly, the Exchange does not believe that the proposed changes will impair the ability of members or competing venues to maintain their competitive standing in the financial markets. Further, excessive fees would serve to impair an exchange's ability to compete for order flow and members rather than burdening competition. Moreover, the proposed fee changes are designed to incentivize liquidity, which the Exchange believes will benefit all market participants by encouraging a transparent and competitive market. The Exchange operates in a highly competitive market in which market participants can readily direct their order flow to competing venues. In such an environment, the Exchange must continually review, and consider adjusting, its fees and rebates to remain competitive with other exchanges. For the reasons described above, the Exchange believes that the proposed fee changes reflect this competitive environment.
No written comments were either solicited or received.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A) of the Act
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:
• Use the Commission's internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.