August 31, 2020

Ms. Vanessa Countryman Secretary
Securities and Exchange Commission
100 F Street NE.,
Washington, DC 20549

Re: Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend the Options Regulatory Fee (File No. SR-CBOE-2020-069)

Dear Ms. Countryman:

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on the above-referenced proposed rule change filed by Cboe Exchange, Inc. (the “Exchange” or “Cboe Options”) with the Securities and Exchange Commission (“Commission”) under Section 19(b)(1) of the Securities Exchange Act of 1934 (“Exchange Act”).2 In the Proposal, Cboe Options is reducing the Options Regulatory Fee (“ORF”) charged by the Exchange from $0.0045 per contract to $0.0023 per contract, effective August 3, 2020, in order to help ensure that revenue collected from the ORF, in combination with other regulatory fees and fines, does not exceed the Exchange’s total regulatory costs. SIFMA notes that Cboe Options’ exchange affiliates, Cboe BZX and Cboe C2, filed similar rule changes to reduce the ORF charged by them and that SIFMA’s comments below on Cboe Options’ ORF rule change apply equally to those two ORF rule changes filed by Cboe BZX and Cboe C2.3

I. The Proposed Rule Change

As noted, Cboe Options proposes to reduce its ORF from $0.0045 per contract to $0.0023 per contract. In the Proposal, the Exchange notes that the ORF is assessed on each member for all transactions that clear in the customer range (i.e., customer transactions) at The Options Clearing Corporation (“OCC”), regardless of the exchange on which the transaction occurs and regardless of whether the firm clearing the trade is a Cboe Options member. Cboe Options also notes revenue generated from the ORF, when combined with all of the Exchange’s other regulatory fees and fines, is designed to recover a material portion of the regulatory costs to the Exchange of the supervision and regulation of members’ customer options businesses including performing routine surveillances, investigations, examinations, financial monitoring, and policy, rulemaking, interpretive, and enforcement activities. Cboe Options further notes that regulatory costs include direct regulatory expenses and certain indirect expenses for work allocated in support of the regulatory function. It provides a breakdown of direct regulatory expenses (74%) and indirect regulatory expenses (26%) as a percentage of overall regulatory costs. In addition, Cboe Options notes that it is the Exchange’s practice that revenue generated from ORF not exceed more than 75% of total annual regulatory costs.