65378 Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices 

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

2 15 U.S.C. 78a. 

3 17 CFR 240.19b–4. 4See footnote 4 [sic] infra. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84821; File No. SR–NYSE– 

2018–54] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing of Proposed Rule Change 

Amending Sections 312.03 and 312.04 

of the Listed Company Manual To 

Amend the Price Requirements for 

Certain Exceptions From the 

Shareholder Approval Rules 

December 14, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on December 

3, 2018, New York Stock Exchange LLC 

(‘‘NYSE’’ or 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 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 Substance of 

the Proposed Rule Change 

The Exchange proposes to amend 

Sections 312.03 and 312.04 of the Listed 

Company Manual (the ‘‘Manual’’) to 

amend the price requirements 

companies must meet in order to avail 

themselves of certain exceptions from 

the shareholder approval requirements 

set forth in Section 312.03. The 

proposed rule change is available on the 

Exchange’s website at www.nyse.com, at 

the principal office of the Exchange, and 

at the Commission’s Public Reference 

Room. 

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 

self-regulatory organization 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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to amend 

Sections 312.03 and 312.04 of the 

Manual to modify the circumstances in 

which listed companies are exempt 

from obtaining shareholder approval for 

share issuances subject to those rules. 

The Exchange notes that the proposed 

amendments are substantially similar to 

amendments NASDAQ recently made to 

its own shareholder approval 

requirements.4

Section 312.03(b) of the Manual 

provides that shareholder approval is 

required prior to the issuance of 

common stock, or of securities 

convertible into or exercisable for 

common stock, in any transaction or 

series of related transactions, to: 

(1) A director, officer or substantial 

security holder of the company (each a 

‘‘Related Party’’); 

(2) a subsidiary, affiliate or other 

closely-related person of a Related 

Party; or 

(3) any company or entity in which a 

Related Party has a substantial direct or 

indirect interest; 

if the number of shares of common stock 

to be issued, or if the number of shares 

of common stock into which the 

securities may be convertible or 

exercisable, exceeds either one percent 

of the number of shares of common 

stock or one percent of the voting power 

outstanding before the issuance. 

However, Section 312.03(b) sets forth 

exceptions to this shareholder approval 

requirement. One of these exceptions is 

applicable where the Related Party 

involved in the transaction is classified 

as such solely because such person is a 

substantial security holder and the 

issuance relates to a sale of stock for 

cash at a price at least as great as each 

of the book and market value of the 

issuer’s common stock. Where these 

conditions are met, shareholder 

approval will not be required unless the 

number of shares of common stock to be 

issued, or unless the number of shares 

of common stock into which the 

securities may be convertible or 

exercisable, exceeds either five percent 

of the number of shares of common 

stock or five percent of the voting power 

outstanding before the issuance. 

Section 312.03(c) generally requires 

shareholder approval prior to the 

issuance of common stock, or of 

securities convertible into or exercisable 

for common stock, in any transaction or 

series of related transactions if: 

(1) The common stock has, or will 

have upon issuance, voting power equal 

to or in excess of 20 percent of the 

voting power outstanding before the 

issuance of such stock or of securities 

convertible into or exercisable for 

common stock; or 

(2) the number of shares of common 

stock to be issued is, or will be upon 

issuance, equal to or in excess of 20 

percent of the number of shares of 

common stock outstanding before the 

issuance of the common stock or of 

securities convertible into or exercisable 

for common stock. 

Among the exceptions to the 

shareholder approval requirements of 

Section 312.03(c) is one applicable to 

‘‘bona fide private financings,’’ as such 

term is defined in Section 312.04(g). A 

bona fide private financing is exempt 

from the shareholder approval 

requirements of Section 312.03(c), if 

such financing involves a sale of: 

• Common stock, for cash, at a price 

at least as great as each of the book and 

market value of the issuer’s common 

stock; or 

• securities convertible into or 

exercisable for common stock, for cash, 

if the conversion or exercise price is at 

least as great as each of the book and 

market value of the issuer’s common 

stock. 

Section 312.04(g) defines a bona fide 

private financing as a sale in which 

either: 

• A registered broker-dealer 

purchases the securities from the issuer 

with a view to the private sale of such 

securities to one or more purchasers; or 

• the issuer sells the securities to 

multiple purchasers, and no one such 

purchaser, or group of related 

purchasers, acquires, or has the right to 

acquire upon exercise or conversion of 

the securities, more than five percent of 

the shares of the issuer’s common stock 

or more than five percent of the issuer’s 

voting power before the sale. 

For purposes of the exceptions from 

the shareholder approval requirements 

of Sections 312.03(b) and (c) set forth 

above, the Exchange utilizes for the 

pricing test the definition of ‘‘market 

value’’ set forth in Section 312.04(i). 

Section 312.04(i) defines the ‘‘market 

value’’ of an issuer’s common stock as 

the official closing price on the 

Exchange as reported to the 

Consolidated Tape immediately 

preceding the entering into of a binding 

agreement to issue the securities. 

The Exchange proposes to replace the 

definition of market value in Section 

312.04(i) with a new definition to be 


khammond on DSK30JT082PROD with NOTICES
Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices 65379 

5See Exchange Act Release No. 34–84287 

(September 26, 2018) (SR–NASDAQ–2018–008); 83 

FR 49599 (October 2, 2018). NASDAQ does not 

have a provision in its rules which is comparable 

to the limitations on cash sales to related parties 

under Section 312.03(b) and the related exception 

available to related parties which have that status 

solely because they are substantial securityholders. 

However, the rationale NASDAQ applied in 

adjusting its pricing test where applicable is 

relevant to the application of the pricing test in 

Section 312.03(b). 

6The manner in which the official closing price 

as reported to the Consolidated Tape is determined 

is set forth in NYSE Rule 123C(1)(e). The proposed 

definition of ‘‘Official Closing Price’’ will be 

numbered as 312.04(j) and the current text of 

Sections 312.04(j) and (k) will be redesignated as 

Sections 312.04(k) and (l) respectively. 

7This proposed change is solely for the purpose 

of conforming the language used throughout the 

rule and does not have any substantive effect. 

8This is stated in Section 312.03(a). 

9Section 312.04(a) states that ‘‘[s]hareholder 

approval is required if any of the subparagraphs of 

Section 312.03 require such approval, 

notwithstanding the fact that the transaction does 

not require approval under one or more of the other 

subparagraphs.’’ 

known as the ‘‘Minimum Price,’’ which 

will be used as the pricing test for the 

exceptions in Sections 312.03(b) and (c) 

for which the market value definition in 

Section 312.04(i) is currently used. This 

proposed amendment is substantially 

similar to an amendment NASDAQ 

recently made to its own shareholder 

approval requirements.5 Minimum Price 

will be defined as a price that is the 

lower of: (i) The Official Closing Price 

immediately preceding the signing of 

the binding agreement; or (ii) the 

average Official Closing Price for the 

five trading days immediately preceding 

the signing of the binding agreement. 

‘‘Official Closing Price’’ of an issuer’s 

common stock will be defined in 

Section 312.04 as meaning the official 

closing price on the Exchange as 

reported to the Consolidated Tape 

immediately preceding the signing of a 

binding agreement to issue the 

securities.6 Section 312.04(i) in its 

current form has a provision stating that 

‘‘[f]or example, if the transaction is 

entered into after the close of the regular 

session at 4:00 p.m. Eastern Standard 

Time on a Tuesday, then Tuesday’s 

official closing price is used. If the 

transaction is entered into at any time 

between the close of the regular session 

on Monday and the close if the regular 

session on Tuesday, then Monday’s 

official closing price is used.’’ The 

Exchange proposes to retain this 

clarifying text as part of the proposed 

definition of the ’’Official Closing 

Price.’’ In addition, all references to 

‘‘entering into’’ agreements in this text 

and elsewhere in the proposed 

definition will be replaced by references 

to ‘‘signing’’ agreements.7 The Exchange 

also proposes to delete text from the 

current form of Section 312.04(i) which 

notes that an average price over a period 

of time is not acceptable as ‘‘market 

value’’ for purposes of Section 312.03, 

as it will no longer be accurate if the 

proposed amendment is approved. 

It is a widespread practice in 

commercial transactions involving the 

issuance of securities to use a five day 

average in determining the market price 

for purposes of calculating pricing 

provisions of agreements, as the use of 

a single day’s closing price can result in 

unanticipated and inequitable results 

due to unexpected price volatility. 

There are also potential negative 

consequences to using a five-day 

average as the sole measure of whether 

shareholder approval is required. For 

example, in a declining market, the five 

day average price will always be above 

the current market price, thus making it 

difficult for companies to close 

transactions because investors could 

buy shares in the market at a price 

below the five-day average price rather 

than by buying shares from the 

company at the agreed-upon price. 

Conversely, in a rising market, the five 

day average price will be lower than the 

closing price. In addition, if material 

news is announced during the five-day 

period, the average could be 

significantly different from the market 

value of the securities as reflected by the 

closing price after the news is disclosed. 

Nonetheless, the Exchange believes that 

these risks are already accepted in the 

market, as evidenced by the use of an 

average price in transactions that do not 

require shareholder approval under the 

Exchange’s rules, such as where less 

than 20% of the outstanding shares are 

issuable in the transaction, 

notwithstanding the risk of possible 

unfavorable price movements borne by 

both the issuer and the purchaser of the 

securities during the time between 

when the agreement is executed and the 

closing of the transaction. The Exchange 

believes these concerns about the 

appropriateness of using a five-day 

average are justified and as such, the 

Exchange’s proposed Minimum Price 

definition utilizes the lower of the most 

recent closing price or the average of 

closing prices on the five most recent 

trading days. 

The Exchange also proposes to 

eliminate from Sections 312.03(b) and 

(c) the requirement that the price paid 

in any transaction qualifying for the 

exemptions under those rules must not 

be less than book value. Book value is 

an accounting measure and its 

calculation is based on the historic cost 

of assets, not their current value. As 

such, listed companies have argued to 

the Exchange on many occasions, and 

the Exchange agrees, that book value is 

not a meaningful measure to be used in 

determining whether a transaction is 

dilutive or should otherwise require 

shareholder approval. The Exchange has 

also observed that when the market 

price is below the book value, issuers 

are often extremely surprised when 

confronted with the effect it has on their 

proposed transactions. In that regard, 

the existing book value test can have 

anomalous effects in transactions that 

appear to be clearly commercially 

reasonable for the issuer and have a 

disproportionate impact on companies 

in certain industries and at certain 

times. For example, during the financial 

crisis in 2008 and 2009, many banks 

and finance-related companies 

temporarily traded below book value. 

Similarly, companies that make large 

investments in infrastructure may have 

a market capitalization that is 

significantly less than the accounting 

carrying value of those assets. In these 

situations, companies are precluded for 

purely technical accounting reasons 

from quickly raising capital on terms 

that are clearly at or above the market 

price. Furthermore, the Exchange is not 

aware of any evidence that shareholders 

consider book value to be a material 

factor when they are asked to vote to 

approve a proposed transaction. 

The Exchange notes that the existence 

of any exception from the shareholder 

approval requirements of any subsection 

of Section 312.03 does not relieve listed 

companies of their obligation to comply 

with any separate shareholder approval 

requirement under Section 303A.08 8 or 

under other applicable subsections of 

Section 312.03.9 Section 303A.08 

provides that any issuance of common 

stock to any employee, director or other 

service provider of a listed company as 

compensation for services is generally 

treated as equity compensation for 

purposes of that rule and must either be 

approved by the shareholders or be 

drawn from a shareholder-approved 

equity compensation plan. Section 

303A.08 provides an exception from 

this requirement for plans that merely 

allow employees, directors or other 

service providers to elect to buy shares 

on the open market or from the listed 

company for their current fair market 

value. For purposes of that exception, 

the Exchange has always interpreted fair 

market value as identical to the Official 

Closing Price definition proposed to be 

adopted in Section 312.04. To avoid any 

potential confusion, the Exchange 

intends to submit a separate rule filing 

to amend Section 303A.08 to include 


khammond on DSK30JT082PROD with NOTICES
65380 Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices 

10 15 U.S.C. 78f(b). 

11 15 U.S.C. 78f(b)(5). 

the definition of Official Closing Price 

in that rule solely for purposes of 

qualifying for the exemption under 

Section 303A.08 for cash sales for fair 

market value described above. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Exchange Act,10 in 

general, and furthers the objectives of 

Section 6(b)(5) of the Exchange Act,11 in 

particular in that it is designed 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 is not designed to 

permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

Definition of Market Value 

The proposed rule change will modify 

the minimum price for the relevant 

exceptions to the shareholder approval 

requirements of Sections 312.03(b) and 

(c) to the lower of: (i) The Official 

Closing Price immediately preceding the 

signing of the binding agreement; or (ii) 

the average Official Closing Price for the 

five trading days immediately preceding 

the signing of the binding agreement. 

Allowing share issuances to be priced at 

the five-day average of the closing price 

will better align the Exchange’s 

requirements with how many 

transactions that are not designed to 

comply with the applicable exceptions 

in Sections 312.03(b) and (c) are 

structured, such as transactions not 

subject to Sections 312.03(b) and (c) 

because the issuance is for less than 

20% of the common stock and the 

parties rely on the five day average for 

pricing to smooth out unusual 

fluctuations in price. In so doing, the 

proposed rule change will perfect the 

mechanism of a free and open market. 

Further, allowing a five day average 

price continues to protect investors and 

the public interest because it will allow 

companies and investors to price 

transactions in a manner designed to 

eliminate aberrant pricing resulting 

from unusual transactions on the day of 

a transaction. Limiting the allowable 

average to a five-day period also 

protects investors by ensuring the 

period is not too long, thereby avoiding 

any distortion of the average price by 

the inclusion in the average historical 

pricing data that reflects market factors 

that are no longer relevant. In a market 

that rises each day of the period, the 

five-day average will be less than the 

price at the end of the period, but would 

still be higher than the price at the start 

of such period. This protects investors 

by ensuring that the average price will 

at least partially reflect the benefits of 

the more favorable recent market price. 

Further, aside from Exchange 

requirements, when selecting the 

appropriate price for a transaction 

company officers and directors have to 

consider their state law requirements, 

including fiduciary responsibilities 

intended to protect shareholder 

interests. 

The Exchange believes that where two 

alternative measures of value exist that 

both reasonably approximate the value 

of listed securities, defining the 

Minimum Price as the lower of those 

values allows issuers the flexibility to 

use either measure because they can 

also sell securities at a price greater than 

the Minimum Price without needing 

shareholder approval. This flexibility, 

and the certainty that a transaction can 

be structured at either value in a manner 

that will not require shareholder 

approval, further perfects the 

mechanism of a free and open market 

without diminishing the existing 

investor protections of Sections 

312.03(b) and (c). 

Book Value 

The Exchange also believes that 

eliminating the requirement for 

shareholder approval of issuances at a 

price less than book value but greater 

than market value does not diminish the 

existing investor protections of Sections 

312.03(b) and (c). Book value is 

primarily an accounting measure 

calculated based on historic cost and is 

generally perceived as not being a 

meaningful measure to use in analyzing 

the current value of a stock. The 

Exchange has also observed that the 

existing book value test can appear 

arbitrary and have a disproportionate 

impact on companies in certain 

industries and at certain times. For 

example, during the financial crisis in 

2008 and 2009, many banks and 

finance-related companies traded below 

book value. Similarly, companies that 

make large investments in infrastructure 

may have a market capitalization that is 

significantly less than the accounting 

carrying value of those assets. Because 

book value is not a meaningful measure 

of the current value of a stock, the 

elimination of the requirement for 

shareholder approval of issuances at a 

price less than book value but greater 

than market value will remove an 

impediment to, and perfect the 

mechanism of, a free and open market, 

which currently unfairly burdens 

companies in certain industries, without 

meaningfully diminishing investor 

protections of Sections 312.03(b) and 

(c). 

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 that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed rule change would revise 

requirements that burden issuers by 

unnecessarily limiting the 

circumstances where they can sell 

securities without shareholder approval. 

All listed companies would be affected 

in the same manner by these changes. 

As such, these changes are neither 

intended to, nor expected to, impose 

any burden on competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or up to 90 days (i) as the 

Commission may designate if it finds 

such longer period to be appropriate 

and publishes its reasons for so finding 

or (ii) as to which the self-regulatory 

organization consents, the Commission 

will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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– 

NYSE–2018–54 on the subject line. 


khammond on DSK30JT082PROD with NOTICES
Federal Register / Vol. 83, No. 244 / Thursday, December 20, 2018 / Notices 65381 

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). 

5See Miami International Securities Exchange 

LLC (‘‘MIAX’’) Fee Schedule. MIAX charges its 

Members and non-Members a monthly fee of $1,100 

for each 1 Gigabit connection and $5,500 for each 

10 Gigabit connection to MIAX’s Primary/ 

Secondary Facility. The Exchange notes a minor 

difference between MIAX’s connectivity fees and 

BOX’s proposal. MIAX prorates their connectivity 

fees when a Member makes a change to their 

connectivity (by adding or deleting connections). 

BOX notes that, like the Exchange’s Port Fees and 

Continued 

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–NYSE–2018–54. 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–NYSE–2018–54, and 

should be submitted on or before 

January 10, 2019. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Eduardo A. Aleman, 

Deputy Secretary. 

[FR Doc. 2018–27510 Filed 12–19–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84823; File No. SR–BOX– 

2018–37] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing of a 

Proposed Rule Change To Amend the 

Fee Schedule on the BOX Market LLC 

(‘‘BOX’’) Options Facility To Establish 

BOX Connectivity Fees for Participants 

and Non-Participants Who Connect to 

the BOX Network; Suspension of and 

Order Instituting Proceedings To 

Determine Whether To Approve or 

Disapprove the Proposed Rule Change 

December 14, 2018. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on November 

30, 2018, BOX Exchange LLC 

(‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

as described in Item II below, which 

Item has 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 The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons and is, 

pursuant to Section 19(b)(3)(C) of the 

Act, hereby: (i) Temporarily suspending 

the proposed rule change; and (ii) 

instituting proceedings to determine 

whether to approve or disapprove the 

proposed rule change. 

I. Self-Regulatory Organization’s 

Statement of the Terms of 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. 

The fees became 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 

Description of 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 VI. (Technology Fees) of the 

BOX Fee Schedule to establish BOX 

Connectivity Fees for Participants and 

non-Participants who connect to the 

BOX network. Connectivity fees will be 

based upon the amount of bandwidth 

that will be used by the Participant or 

non-Participant. Further, BOX 

Participants or non-Participants 

connected as of the last trading day of 

each calendar month will be charged the 

applicable Connectivity Fee for that 

month. The Connectivity Fees will be as 

follows: 

Connection type Monthly fees 

Non-10 Gb Connection.$1,000 per connection 

10 Gb Connection ..... $5,000 per connection 

The Exchange also proposes to amend 

certain language and numbering in 

Section VI.A to reflect the changes 

discussed above. Specifically, BOX 

proposes to add the title ‘‘Third Party 

Connectivity Fees’’ under Section VI.A. 

Further, the Exchange proposes to add 

Section VI.A.2, which details the 

proposed BOX Connectivity Fees 

discussed above. 

Participants and non-Participants 

with ten (10) Gigabit (‘‘Gb’’) connections 

will be charged a monthly fee of $5,000 

per connection. Participants and nonParticipants with non-10 Gb 

connections will be charged a monthly 

fee of $1,000 per connection. The 

Exchange notes that another exchange 

in the industry has similar connectivity 

fees 5 and that several other exchanges 


khammond on DSK30JT082PROD with NOTICES