65192 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Notices 

12 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3 15 U.S.C. 78s(b)(3)(A)(ii). 

4 17 CFR 240.19b–4(f)(2). 

5Options overlying Standard and Poor’s 

Depositary Receipts/SPDRs (‘‘SPY’’) are based on 

the SPDR exchange-traded fund (‘‘ETF’’), which is 

designed to track the performance of the S&P 500 

Index. 

6Transactions executed through Price 

Improvement Period (‘‘PIP’’) and the Complex 

Order Price Improvement Period (‘‘COPIP’’) auction 

mechanisms. All COPIP transactions will be 

charged per contract per leg. 

7See Nasdaq Phlx LLC (‘‘Phlx’’) Pricing Schedule 

Section 3, Part C. Phlx assesses a $0.05 per contract 

fee for all PIXL Initiating Orders in SPY (PIXL is 

Phlx’s price improvement mechanism similar to 

BOX’s PIP mechanism). Further, Phlx assesses a 

$0.38 per contract fee to non-Customers when their 

PIXL Order is contra to an Initiating Order; unless 

the PIXL Order is a Public Customer, in which case 

the fee is $0.00 per contract. Next, the Exchange 

believes the $0.02 per contract Primary 

Improvement Order fee for SPY executions is 

reasonable when compared to Phlx’s fees for similar 

transactions. The Exchange also notes the proposed 

SPY PIP and COPIP Order Fees are identical to the 

PIP and COPIP Order Fees that currently apply to 

all options. The Exchange is simply carving out a 

separate section for all SPY PIP and COPIP 

transactions. 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NYSEArca–2018–90 and 

should be submitted on or before 

January 9, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27408 Filed 12–18–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84814; File No. SR–BOX– 

2018–36] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fee 

Schedule on the BOX Options Market 

LLC (‘‘BOX’’) Facility To Establish 

Separate Fees and Credits on PIP and 

COPIP Transactions for SPY Options 

December 13, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on November 

30, 2018, BOX Exchange LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Exchange filed the proposed rule change 

pursuant to Section 19(b)(3)(A)(ii) of the 

Act,3 and Rule 19b–4(f)(2) thereunder,4

which renders the proposal effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the Fee Schedule on the BOX 

Market LLC (‘‘BOX’’) options facility. 

While changes to the fee schedule 

pursuant to this proposal will be 

effective upon filing, the changes will 

become operative on December 1, 2018. 

The text of the proposed rule change is 

available from the principal office of the 

Exchange, at the Commission’s Public 

Reference Room and also on the 

Exchange’s internet website at http://

boxexchange.com. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

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. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Section I.B, PIP and COPIP Transactions 

and Section III, Liquidity Fees and 

Credits of the BOX Fee Schedule. 

Specifically, the Exchange proposes to 

establish separate fees and credits on 

PIP and COPIP Transactions for options 

overlying the Standard and Poor’s 

Depositary Receipts Trust (‘‘SPY’’).5

First, the Exchange proposes to 

establish PIP and COPIP Transaction 6

fees for options overlying SPY. 

Specifically, the Exchange proposes a 

$0.05 fee for Professional Customers, 

Broker Dealers and Market Makers for 

SPY PIP or COPIP Orders. Public 

Customers will not be charged for SPY 

PIP or COPIP Orders. The Exchange 

notes that the proposed SPY fees are 

identical to the current PIP and COPIP 

Order fees. For SPY Improvement 

Orders, the Exchange proposes a $0.05 

fee for all account types. For SPY 

Primary Improvement Orders, the 

Exchange proposes to establish a flat per 

contract execution fee of $0.02. 

The Exchange notes that all SPY 

transactions executed through the PIP 

and COPIP auction mechanisms will be 

included in the calculation of Customer 

Volume in Multiply Listed Options 

Classes for purposes of the Primary 

Improvement Order tiered execution fee 

and BOX Volume Rebate in Section I.B 

of the BOX Fee Schedule. However, the 

tiered execution fee and rebates defined 

in Section I.B will not apply to 

executions in SPY. The Exchange 

believes that the proposed fees 

discussed above are reasonable as they 

are similar to another options 

exchange.7

Lastly, the Exchange proposes to 

establish liquidity fees and credits for 

SPY executions in the PIP or COPIP 

auction mechanisms. Currently, in 

Section III.A of the Fee Schedule, a 

Public Customer PIP or COPIP Order 

receives a ‘‘removal’’ credit while the 

corresponding Primary Improvement 

Order and any Improvement Order are 

charged an ‘‘add’’ fee. The Exchange 

proposes a $0.45 fee for all SPY PIP and 

COPIP transactions that add liquidity 

and a $0.45 credit for all SPY COPIP 

and PIP transactions that remove 

liquidity. 


amozie on DSK3GDR082PROD with NOTICES1
Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Notices 65193 

8See Phlx Pricing Schedule, Section 3, Part A. 

The Exchange notes that Phlx offers rebates ranging 

from $0.15 to $0.35 to Specialists and Market 

Makers for adding liquidity in SPY. Further, Phlx 

assesses a $0.48 fee for Market Makers, Broker 

Dealers and Professionals and a $0.45 fee for Public 

Customers for removing liquidity in SPY. As 

discussed herein, the Exchange proposes to assess 

fees for adding liquidity in SPY and offer credits for 

removing liquidity in SPY. The Exchange believes 

this is reasonable as the proposed change mirrors 

the structure of the liquidity fees and credits 

currently in place in the BOX Fee Schedule for PIP 

and COPIP transactions. 

9 15 U.S.C. 78f(b)(4) and (5). 

10The Exchange is proposing to decrease the fees 

for SPY Improvement Orders, which are responses 

in the PIP and COPIP mechanisms, to $0.05 for all 

types of Participants; as well as assess a flat $0.02 

fee for SPY Primary Improvement Orders. The 

Exchange believes these decreased fees are 

reasonable and will result in increased SPY order 

flow to BOX’s auction mechanisms. 

11See supra note 7. 

12The Exchange notes that under the volume base 

tiered fee structure for Primary Improvement 

Orders, a majority of BOX Participants reach the 

highest tier and are assessed the $0.02 fee for their 

Primary Improvement Orders. Further, 

Improvement Orders are assessed $0.12 for 

Professional Customers and Broker Dealers and 

Market Makers and $0.15 for Public Customers. 

Under this proposal, SPY Primary Improvement 

Orders will be assessed the $0.02 flat fee and the 

SPY Improvement Order will be charged $0.05 

(regardless of account type), a substantially less 

differential than what is currently assessed today 

for SPY transactions. 13See supra note 8. 

Further, under the BOX Fee schedule, 

when Non-Public Customer PIP or 

COPIP orders do not trade with its 

Primary Improvement Order, the 

Primary Improvement Order receives a 

‘‘removal’’ credit and any corresponding 

Improvement Order responses are 

charged an ‘‘add’’ fee. For these types of 

executions the Exchange proposes a 

$0.45 fee for all SPY PIP and COPIP 

transactions that add liquidity and a 

$0.45 credit for all SPY PIP and COPIP 

transactions that remove liquidity. The 

Exchange notes that the proposed fees 

and credits are similar to fees at another 

options exchange.8 Lastly, the Exchange 

notes that it is updating the footnotes 

throughout the Fee Schedule to 

accommodate the addition of new 

footnotes related to the changes 

discussed above. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act, 

in general, and Section 6(b)(4) and 

6(b)(5)of the Act,9 in particular, in that 

it provides for the equitable allocation 

of reasonable dues, fees, and other 

charges among BOX Participants and 

other persons using its facilities and 

does not unfairly discriminate between 

customers, issuers, brokers or dealers. 

The Exchange’s proposal to adopt 

new pricing for PIP and COPIP SPY 

executions is reasonable, equitable, and 

not unfairly discriminatory because 

pricing by symbol is a common practice 

on many U.S. options exchanges as a 

means to incentivize order flow to be 

sent to an exchange for execution in the 

most actively traded options classes.10

The Exchange notes that another 

options exchange has a similar pricing 

structure for SPY in their respective 

price improvement mechanism.11

The Exchange believes that the 

proposed fees for SPY PIP and COPIP 

Orders are reasonable, equitable and not 

unfairly discriminatory. As noted above, 

these fees are identical to the current 

PIP and COPIP Order fees assessed on 

the Exchange. 

The Exchange believes that the 

proposed SPY Improvement Order fees 

are equitable and not unfairly 

discriminatory as the decreased fees 

will encourage market participants to 

take advantage of the new pricing 

structure and respond to more SPY PIP 

and COPIP Orders. The Exchange 

believes it is reasonable to assess lower 

fees to transact SPY Improvement 

Orders (compared to Penny and NonPenny Improvement Orders) because the 

Exchange seeks to incentivize market 

participants to transact a greater number 

of SPY option transactions in the PIP or 

COPIP mechanisms. 

The Exchange’s proposal to assess a 

flat fee for SPY Primary Improvement 

Orders is reasonable, equitable and not 

unfairly discriminatory. Specifically, 

the Exchange is proposing a flat $0.02 

per contract fee which is the same as the 

highest volume tier for all other Primary 

Improvement Orders.12 The Exchange 

believes that the proposed fee will 

encourage Participants to submit 

Primary Improvement Orders to the 

Exchange, thus increasing order flow to 

BOX’s auction mechanisms and 

benefitting all market participants. 

Further, the Exchange believes 

exempting SPY COPIP and PIP Orders 

from the BVR is reasonable, equitable 

and not unfairly discriminatory. The 

Exchange notes that the BVR is meant 

to incentivize order flow, which the 

Exchange believes is already achieved 

by assessing lower fees for SPY PIP and 

COPIP Orders. 

The Exchange believes including SPY 

transactions in the Customer Volume in 

Multiply Listed Options Classes for 

purposes of the Primary Improvement 

Order tiered execution fee and BOX 

Volume Rebate is reasonable as it will 

allow market participants to benefit 

from SPY PIP and COPIP volume in 

terms of qualifying for these volume 

based thresholds in Section I.B.1 of the 

Fee Schedule. Lastly, the Exchange 

believes the proposed change is 

equitable and not unfairly 

discriminatory because the Exchange 

includes the SPY PIP and COPIP 

transaction volume regardless of 

account type. 

The Exchange believes that the 

proposed changes to Section III 

(Liquidity Fees and Credits) are 

equitable and not unfairly 

discriminatory in that the fees and 

credits apply to all categories of 

participants and across all account 

types. The Exchange notes that liquidity 

fees and credits on BOX are meant to 

offset one another in any particular 

transaction. The liquidity fees and 

credits do not directly result in revenue 

to BOX, but simply allows BOX to 

provide incentives to Participants to 

attract order flow. The Exchange also 

believes the proposed liquidity fees and 

credits for SPY PIP and COPIP 

transactions are reasonable as they 

mirror the structure of liquidity fees and 

credits currently in place for PIP and 

COPIP transactions on BOX. Further, 

the Exchange notes that Phlx assesses 

fees and offers rebates for removing or 

adding liquidity in SPY.13

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes that the proposed 

pricing for SPY options in PIP and 

COPIP transactions promotes 

competition in this highly liquid option. 

The Exchange does not believe that the 

proposed changes will burden 

competition by creating a disparity 

between the fees an Initiating 

Participant in the PIP or COPIP auction 

pays and the fees a competitive 

responder pays that would result in 

certain Participants being unable to 

compete with initiators. In fact, the 

Exchange believes that these changes 

will not impair these Participants from 

adding liquidity and competing in the 

auction mechanisms and will help 

promote competition by providing 

incentives for market participants to 

submit SPY PIP or COPIP order flow to 

BOX and thus, create a greater 

opportunity for customers to receive 

additional price improvement. 

Further, the Exchange believes that 

the proposed liquidity fees and credits 

for SPY PIP and COPIP transactions will 

not impose a burden on competition. 

Rather, BOX believes that the changes 


amozie on DSK3GDR082PROD with NOTICES1
65194 Federal Register / Vol. 83, No. 243 / Wednesday, December 19, 2018 / Notices 

14 15 U.S.C. 78s(b)(3)(A)(ii). 

15 17 CFR 240.19b–4(f)(2). 16 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 84480 

(Oct. 24, 2018), 83 FR 54635. 

4 15 U.S.C. 78s(b)(2). 

5 Id. 

will result in Participants being charged 

or credited appropriately for their PIP 

and COPIP transactions and is designed 

to enhance competition in Auction 

transactions on BOX. Submitting an 

order is entirely voluntary and 

Participants can determine which type 

of order they wish to submit, if any, to 

the Exchange. 

Finally, the Exchange notes that it 

operates in a highly competitive market 

in which market participants can 

readily favor competing exchanges. In 

such an environment, the Exchange 

must continually review, and consider 

adjusting, its fees and credits to remain 

competitive with other exchanges. For 

the reasons described above, the 

Exchange believes that the proposed 

rule change reflects this competitive 

environment. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the 

Exchange Act 14 and Rule 19b–4(f)(2) 

thereunder,15 because it establishes or 

changes a due, or fee. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend the rule change if 

it appears to the Commission that the 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or would otherwise further 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

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: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

BOX–2018–36 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BOX–2018–36. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–BOX–2018–36, and should 

be submitted on or before January 9, 

2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27411 Filed 12–18–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84816; File No. SR– 

CboeBZX–2018–066] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of 

Designation of a Longer Period for 

Commission Action on Proposed Rule 

Change To Permit the Listing and 

Trading of P.M.-Settled Series on 

Certain Broad-Based Index Options on 

a Pilot Basis 

December 13, 2018. 

On October 11, 2018, Cboe BZX 

Exchange, Inc. filed with the Securities 

and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

19(b)(1) of the Securities Exchange Act 

of 1934 (‘‘Act’’) 1 and Rule 19b–4 

thereunder,2 a proposed rule change to 

permit the listing and trading of P.M.- 

settled series on certain broad-based 

index options on a pilot basis. The 

proposed rule change was published for 

comment in the Federal Register on 

October 30, 2018.3 The Commission has 

received no comment letters on the 

proposed rule change. 

Section 19(b)(2) of the Act 4 provides 

that, within 45 days of the publication 

of notice of the filing of a proposed rule 

change, or within such longer period up 

to 90 days as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or as to which the 

self-regulatory organization consents, 

the Commission shall either approve the 

proposed rule change, disapprove the 

proposed rule change, or institute 

proceedings to determine whether the 

proposed rule change should be 

disapproved. The 45th day after 

publication of the notice for this 

proposed rule change is December 14, 

2018. The Commission is extending this 

45-day time period. 

The Commission finds that it is 

appropriate to designate a longer period 

within which to take action on the 

proposed rule change so that it has 

sufficient time to consider the proposed 

rule change. Accordingly, the 

Commission, pursuant to Section 

19(b)(2) of the Act,5 designates January 

28, 2019 as the date by which the 

Commission shall either approve or 

disapprove or institute proceedings to 

determine whether to disapprove the 


amozie on DSK3GDR082PROD with NOTICES1