2024-22736. Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Adopt Fees for New Logical Ports in Connection With a New Connectivity Offering on Its Equity Options ...

BOE Unitized Logical Port	$350/port/month.
Bulk Unitized Logical Port	$550/port/month.
Purge Unitized Logical Port	$400/port/month.
BOE Unitized Logical Port (Set)	$2,500/month for 1st and 2nd port set. $3,000/month for 3rd-14th port set. $3,500/month for 15th-20th port set.
Bulk Unitized Logical Port (Set)	$5,500/month for 1st and 2nd port set. $6,000/month for 3rd-14th port set. $6,500/month for 15th-20th port set.
Purge Unitized Logical Port (Set)	$2,500/month for 1st and 2nd port set. $3,000/month for 3rd-14th port set. $3,500/month for 15th-20th port set.

The proposed fees for Unitized Logical Port Sets are progressive. For example, if a User were to purchase 11 BOE Unitized Logical Port Sets, it will be charged a total of $32,000 per month ($2,500 * 2 + $3,000 * 9). As is the case today for existing logical ports, the monthly fees are assessed and applied in their entirety and are not prorated. The Exchange notes the current standard fees assessed for existing logical ports will remain applicable and unchanged.^[17] The proposed fees for Unitized Logical Port Sets will be assessed per set, per Port Type. As an example, if a Member requests three BOE Unitized Logical Port Sets, one Bulk Unitized Logical Port Set, and one Purge Unitized Logical Port Set, the firm would be charged $8,000 ($2,500 + $2,500 + $3,000) for the three BOE Unitized Logical Port Sets, $5,500 for the one Bulk Unitized Logical Port Set, and $2,500 for the one Purge Unitized Logical Port Set.^[18]

Since the Exchange has a finite amount of capacity, it also proposes to prescribe a maximum limit on the number of Unitized Logical Ports that may be purchased and used on a per firm, per Matching Unit basis. The purpose of establishing these limits is to manage the allotment of Unitized Logical Ports in a fair and reasonable manner while preventing the Exchange from being required to expend large amounts of resources in order to provide an unlimited capacity to its matching engines. Particularly, the Exchange proposes to provide that the two structures ( i.e., individual unitized ports or unitized port sets) can be combined for up to a maximum of 20 Unitized Logical Ports per Member, per Matching Unit, per port type. As an example, a Member may request 2 BOE Unitized Logical Port Sets and 18 individual BOE Unitized Logical Ports for Matching Unit 1, providing a total max of 20 BOE Unitized Logical Ports on Matching Unit 1 specifically. This would result in having 20 BOE Unitized Logical Ports on Matching Unit 1 and 2 BOE Unitized Ports on all additional Matching Units as part of the 2 BOE Unitized Logical Port Sets requested. Additionally, a firm may request 20 Bulk Unitized Logical Port Sets and 20 Purge Unitized Logical Port Sets as those would constitute different port types.^[19] The Exchange believes the proposed cap will be sufficient for the vast majority of Members.^[20] The Exchange notes that it will monitor interest in Unitized Logical Ports and system capacity availability with the goal of increasing these limits to meet Members needs if and when the demand is there, and the Exchange is able to accommodate it. Additionally, Members will still be able to utilize the existing logical port connectivity offerings with no maximum limit in addition to their Unitized Logical Port allocation.

Average Daily Quotes and Average Daily Order Fees

The Exchange also proposes to adopt Average Daily Order (“ADO”) and Average Daily Quote (“ADQ”) fees. “ADO” represents the total number of orders for the month, divided by the number of trading days. “ADQ” represents the total number of quotes for the month, divided by the number of trading days. When measuring a Member's ADO and ADQ, orders, quotes, cancel/replace modify orders, and quote updates which submit a bid or offer and do not include cancels, are included. Further ADO and ADQ will include orders and quotes submitted by a Member from all logical port types ( i.e., non-unitized logical ports and Unitized Logical Ports). Each Member may submit up to 2,000,000 average daily orders or up to 250,000,000 average daily quotes per calendar month without incurring any ADO or ADQ fees. In the event that the average number of quotes per trading day during a calendar month submitted exceeds 250,000,000, each incremental usage of up to 20,000 average daily quotes will incur an additional fee as set forth in the ( print page 80617) table below. Similarly, in the event that the average number of orders per trading day during a calendar month submitted exceeds 2,000,000, each incremental usage of up to 1,000 average daily orders will incur an additional ADO fee as set forth in the table below.^[21] A Member's ADO and ADQ will be aggregated together with any affiliated Member sharing at least 75% common ownership.

	Fee
	Tier 1	Tier 2	Tier 3	Tier 4	Tier 5
ADQ Fee Rate per 20,000 ADQ	≤250,000,000	>250,000,000	>500,000,000	>1,000,000,000	>3,500,000,000
	$0.00	$0.05	$0.075	$0.10	$0.20
ADO Fee Rate per 1,000 ADO	≤2,000,000	>2,000,000	>2,500,000	>3,000,000	>3,500,000
	$0.00	$1.00	$1.50	$2.00	$2.50