Federal Register / Vol. 86, No. 18 / Friday, January 29, 2021 / Notices 7597 

19 17 CFR 200.30–3(a)(34). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 88949 

(May 26, 2020), 85 FR 33258 (June 1, 2020) 

(‘‘Notice’’). 

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

5See Securities Exchange Act Release No. 89329 

(July 16, 2020), 85 FR 44333 (July 22, 2020). The 

Commission designated August 30, 2020, as the 

date by which the Commission shall approve or 

disapprove, or institute proceedings to determine 

whether to disapprove, the proposed rule change. 6 In Amendment No. 1 the Exchange revised the 

proposal to: (1) Modify its description of the market 

that BSTX would operate, including what would be 

traded on that market; (2) clarify that it is proposing 

to establish BSTX as a facility of the Exchange, but 

that the Exchange would not commence operations 

of the ‘‘BSTX Market’’ (as defined below) absent 

trading rules approved by the Commission that are 

the subject of a separate filing, and that the 

Exchange’s regulatory oversight responsibilities 

with respect to BSTX would not be triggered unless 

SR–BOX–2020–16 is approved by the Commission; 

(3) update a citation to a proposed rule change filed 

by the Exchange to provide flexibility for the 

Exchange to regulate multiple facilities; and (4) 

include a citation to a separate proposed rule 

change filed by the Exchange to provide trading 

rules for the BSTX Market. Amendment No. 1 was 

filed as a partial amendment. See Form 19b–4 for 

Amendment No. 1 to SR–BOX–2020–16 

(‘‘Amendment No. 1 Form 19b–4’’). When the 

Exchange filed Amendment No. 1 to SR–BOX– 

2020–16, it also submitted a redline, which the 

Exchange states reflects the text of the partial 

amendment compared to the original filing, as a 

comment letter to the filing, and which the 

Commission made publicly available at https://

www.sec.gov/comments/sr-box-2020-16/ 

srbox202016-7525322-222100.pdf. 

7See Securities Exchange Act Release No. 89537 

(August 12, 2020), 85 FR 50850 (August 18, 2020) 

(Notice of Filing of Amendment No. 1 and Order 

Instituting Proceedings). 

8 15 U.S.C. 78s(b)(2). 

9See Securities Exchange Act Release No. 90513 

(November 24, 2020), 85 FR 77334 (December 1, 

2020). The Commission designated January 27, 

2021, as the date by which the Commission shall 

approve or disapprove, or institute proceedings to 

determine whether to disapprove, the proposed rule 

change. 

10See Securities Exchange Act Release No. 87868 

(December 30, 2019), 85 FR 345 (January 3, 2020) 

(Notice of Filing of Proposed Rule Change). 

11See id. See also Securities Exchange Act 

Release No. 88536 (April 1, 2020), 85 FR 19537 

(April 7, 2020) (Order Instituting Proceedings) 

(instituting proceedings to determine whether to 

disapprove the proposed rule change). The only 

differences between SR–BOX–2019–37 and SR– 

BOX–2020–16 relate to: (1) Reclassifying ownership 

interests in BSTX from a single class with voting 

rights into two classes—one with voting rights and 

one without voting rights, and related changes; (2) 

providing an updated Second Amended and 

Restated LLC Agreement, dated as of December 24, 

2019; (3) removing the list of BSTX LLC Members 

and their initial capital contributions; and (4) 

modifying the Second Amended and Restated LLC 

Agreement to reflect that a ‘‘Membership Record’’ 

would be maintained by the Secretary of BSTX and 

updated from time to time as necessary and as 

provided in the Second Amended and Restated LLC 

Agreement, which shall include the name, address, 

and number of units of each class of ownership 

interests held by each BSTX LLC Member; (5) 

updating certain upstream ownership information; 

(6) updating references to other proposed rule 

changes of the Exchange; and (7) the modifications 

made by Amendment No. 1. 

12Comments on SR–BOX–2019–37 can be found 

at: https://www.sec.gov/comments/sr-box-2019-37/ 

srbox201937.htm. While the Commission 

considered the comments received on SR–BOX– 

2019–37, they are not germane to the basis for 

disapproval and are not discussed herein. 

13See Securities Exchange Act Release No. 89017 

(June 4, 2020), 85 FR 35473 (June 10, 2020) (Notice 

of Withdrawal of a Proposed Rule Change). 

14The proposed BSTX LLC Agreement is attached 

as Exhibit 5A to the Form 19b–4 for SR–BOX–2020– 

16 (available on the Commission’s website at 

Continued 

regulatory issues that the Commission 

has not previously considered. 

VI. Conclusion 

This order gives effect to the 

Amended Plan filed with the 

Commission in File No. 4–523. The 

Parties shall notify all members affected 

by the Amended Plan of their rights and 

obligations under the Amended Plan. 

It is therefore ordered, pursuant to 

Section 17(d) of the Act, that the 

Amended Plan in File No. 4–523, 

between the FINRA and NYSE Arca, 

filed pursuant to Rule 17d–2 under the 

Act, hereby is approved and declared 

effective. 

It is further ordered that NYSE Arca 

is relieved of those responsibilities 

allocated to FINRA under the Amended 

Plan in File No. 4–523. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.19

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01941 Filed 1–28–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90987; File No. SR–BOX– 

2020–16] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Order Disapproving 

Proposed Rule Change, as Modified by 

Amendment No. 1, in Connection With 

the Proposed Establishment of the 

Boston Security Token Exchange LLC 

as a Facility of the Exchange 

January 25, 2021. 

I. Introduction 

On May 12, 2020, BOX Exchange LLC 

(‘‘Exchange’’ or ‘‘BOX’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

of 1934 (‘‘Exchange Act’’) 1 and Rule 

19b–4 thereunder,2 a proposed rule 

change in connection with the proposed 

commencement of operations of the 

Boston Security Token Exchange LLC 

(‘‘BSTX’’) as a facility of the Exchange. 

The proposed rule change was 

published for comment in the Federal 

Register on June 1, 2020.3 On July 16, 

2020, pursuant to Section 19(b)(2) of the 

Exchange Act,4 the Commission 

designated a longer period within which 

to approve the proposed rule change, 

disapprove the proposed rule change, or 

institute proceedings to determine 

whether to disapprove the proposed 

rule change.5 On August 3, 2020, the 

Exchange filed Amendment No. 1 to the 

proposed rule change (‘‘Amendment No. 

1’’).6 On August 12, 2020, the 

Commission published notice of filing 

of Amendment No. 1, for notice and 

comment, and instituted proceedings to 

determine whether to approve or 

disapprove the proposed rule change, as 

modified by Amendment No. 1.7 On 

November 24, 2020, pursuant to Section 

19(b)(2) of the Exchange Act,8 the 

Commission designated a longer period 

within which to approve the proposed 

rule change, as modified by Amendment 

No. 1, disapprove the proposed rule 

change, as modified by Amendment No. 

1, or institute proceedings to determine 

whether to disapprove the proposed 

rule change, as modified by Amendment 

No. 1.9

The proposed rule change is 

substantially similar to a proposed rule 

change previously filed with the 

Commission by the Exchange as SR– 

BOX–2019–37.10 SR–BOX–2019–37 was 

published for comment in the Federal 

Register on January 3, 2020.11 The 

Commission received comments on the 

substance of SR–BOX–2019–37.12 BOX 

withdrew proposed rule change SR– 

BOX–2019–37 on May 12, 2020.13

This order disapproves the proposed 

rule change, as modified by Amendment 

No. 1 (‘‘BSTX Governance Proposal’’). 

The Exchange proposes to establish 

BSTX as a facility of the Exchange, as 

that term is defined in Section 3(a)(2) of 

the Exchange Act, that would operate a 

market for the trading of securities 

(‘‘BSTX Market’’) and be jointly owned 

and controlled by BOX Digital Markets 

LLC (‘‘BOX Digital’’), a Delaware limited 

liability company and a subsidiary of 

BOX Holdings Group LLC (‘‘BOX 

Holdings,’’ which is also the parent 

company of the Exchange’s existing 

facility BOX Options Market LLC, ‘‘BOX 

Options’’) and tZERO Group, Inc. 

(‘‘tZERO’’), a Delaware limited liability 

company and a subsidiary of 

Overstock.com Inc. (‘‘Overstock’’). 

According to the Exchange, it is 

proposing the Boston Security Token 

Exchange LLC, Second Amended and 

Restated Limited Liability Company 

Agreement, dated as of December 24, 

2019 (‘‘BSTX LLC Agreement’’) 14 as the 


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https://www.sec.gov/rules/sro/box/2020/34-88949- 

ex5a.pdf). 

15See Securities Exchange Act Release Nos. 

88236 (February 19, 2020), 85 FR 10765 (February 

25, 2020) (Notice of Filing of Proposed Rule 

Change); 88934 (May 22, 2020), 85 FR 32085 (May 

28, 2020) (Order Granting Approval of a Proposed 

Rule Change) (SR–BOX–2020–04) (‘‘BOX–2020–04 

Approval’’). 

16See Securities Exchange Act Release Nos. 

88946 (May 26, 2020), 85 FR 33454 (June 1, 2020) 

(Notice of Filing of Proposed Rule Change); 89536 

(August 12, 2020), 85 FR 51250 (August 19, 2020) 

(Notice of Filing of Amendment No. 1 and Order 

Instituting Proceedings) (SR–BOX–2020–14). 

17See Securities Exchange Act Release No. 90735 

(December 18, 2020), 85 FR 84403 (December 28, 

2020) (SR–BOX–2020–14) (Order Disapproving 

Proposed Rule Change, as Modified by Amendment 

No. 1, to Adopt Rules Governing the Trading of 

Equity Securities on the Exchange Through a 

Facility of the Exchange Known as the Boston 

Security Token Exchange LLC) (‘‘BSTX Trading 

Rules Disapproval’’). 

18See infra note 75 and accompanying text. 

19See infra notes 39 and 52 and accompanying 

text. 

20 15 U.S.C. 78f(b)(1). 

21See Notice, supra note 3; Amendment No. 1 

Form 19b–4, supra note 6. 

22See Notice, supra note 3, 85 FR at 33259; 

Amendment No. 1 Form 19b–4, supra note supra 

note 6. 

23See Amendment No. 1 Form 19b–4, supra note 

6, at 4. 

24See id. (citing BSTX Trading Rules Proposal, 

supra note 16). The proposed trading rules for 

BSTX, titled the BSTX Rulebook (‘‘BSTX Rules’’), 

were attached as Exhibit 5A to the 19b–4 for SR– 

BOX–2020–14 (available on the Commission’s 

website at https://www.sec.gov/rules/sro/box/2020/ 

34-89536-ex5a.pdf). Proposed amendments to the 

Exchange’s existing rules to facilitate trading on 

BSTX were attached as Exhibit 5B to the 19b–4 for 

SR–BOX–2020–14 (available on the Commission’s 

website https://www.sec.gov/rules/sro/box/2020/34- 

89536-ex5b.pdf). 

25See Amendment No. 1 Form 19b–4, supra note 

6, at 4. 

26See id. 

27See Notice, supra note 3, 85 FR at 33259, 

nn.10–12 and accompanying text. 

28See id. at 33260. The Exchange also provides 

additional information about the upstream 

ownership of BOX Digital and tZERO. See id. 

29See id. 

30See Notice, supra note 3, 85 FR at 33259–60. 

‘‘Members’’ are defined by the Exchange as the duly 

admitted holders of BSTX Units and would include 

any person later admitted to BSTX as an additional 

or substitute LLC Member as provided by the BSTX 

LLC Agreement. See id.; BSTX LLC Agreement, 

supra note 14, Section 1.1. 

31See Amendment No. 1 Form 19b–4, supra note 

6, at 4. The Exchange also states that tZERO and 

BSTX are affiliates of Overstock. See Notice, supra 

note 3, 85 FR at 33260. 

32See Notice, supra note 3, 85 FR at 33259. 

33See Amendment No. 1 Form 19b–4, supra note 

6, at 5. 

source of governance and operating 

authority for BSTX. Among other things, 

the BSTX LLC Agreement includes 

provisions that are designed to prevent 

any owner of BSTX from exercising 

undue influence over the regulated 

activities of BSTX. As is the case with 

BOX Options, the Exchange would not 

hold an ownership interest in BSTX, but 

would regulate BSTX as a facility of the 

Exchange pursuant to a separate 

agreement between the Exchange and 

BSTX (‘‘Facility Agreement’’). The 

Exchange currently regulates one 

facility, BOX Options, and recently 

amended the Exchange’s governing 

documents to provide for the flexibility 

to regulate additional facilities.15

The Exchange separately filed a 

proposed rule change containing 

proposed trading rules for BSTX that 

would have established the kinds of 

securities that would be listed and 

traded on BSTX, the manner of 

operations of the BSTX Market, and 

eligibility to participate on the BSTX 

Market (‘‘BSTX Trading Rules 

Proposal’’).16 The Commission 

disapproved the BSTX Trading Rules 

Proposal on December 18, 2020.17 As 

discussed in further detail below, this 

Order finds that, given that the trading 

rules for the BSTX facility were not 

approved, and BOX relied upon those 

rules in the BSTX Governance Proposal 

with respect to how BSTX would 

operate the BSTX market and the 

Exchange would provide regulatory 

oversight of BSTX, the Commission is 

unable to assess the scope of the 

Exchange’s regulatory operations, and 

therefore cannot find that the BSTX 

Governance Proposal is consistent with 

the Exchange Act. Specifically, the 

BSTX Governance Proposal does not 

provide sufficient detail about aspects of 

the proposed operation of the BSTX 

Market and regulation of BSTX that 

were addressed in the BSTX Trading 

Rules Proposal, including: (1) The rules 

that would establish which securities 

would be eligible for trading on BSTX, 

which the Exchange refers to as ‘‘BSTX 

Products;’’ 18 (2) the rules that would 

govern an Exchange member’s eligibility 

to trade on BSTX as a ‘‘BSTX 

Participant’’ 19 and their ongoing 

obligations; (3) the rules for trading on 

the BSTX Market; and (4) how the 

Exchange proposes to comply with its 

regulatory obligations with respect to 

the BSTX Market. The Commission 

cannot, therefore, find that the BSTX 

Governance Proposal is consistent with 

the Exchange Act, and in particular 

Section 6(b)(1) of the Exchange Act.20

II. Description of the Proposed Rule 

Change and Exchange’s 

Representations 

As described in the Notice, as 

modified by Amendment No. 1,21 the 

Exchange proposes to establish BSTX as 

a facility (as defined in Section 3(a)(2) 

of the Exchange Act) of the Exchange 

that will operate the BSTX Market and 

adopt the BSTX LLC Agreement for 

BSTX as a facility of the Exchange.22

Specifically, the Exchange states that 

with the BSTX Governance Proposal the 

Exchange proposes to establish BSTX as 

a facility of the Exchange that ‘‘operates 

a market for the trading of securities,’’ 

which market it refers to in the proposal 

as the BSTX Market.23 The Exchange 

also states that it submitted a separate 

filing to establish rules relating to 

trading on BSTX, and that, subject to 

approval of those rules by the 

Commission, BSTX would operate the 

BSTX Market.24 The Exchange states 

that without Commission approval of 

the BSTX Trading Rules Proposal, the 

Exchange would not permit BSTX to 

commence operations of the BSTX 

Market.25 Further, the Exchange states 

that it will not permit BSTX to 

commence operations of the BSTX 

Market, and the Exchange’s regulatory 

oversight responsibilities with respect to 

BSTX would not be triggered, unless the 

BSTX Governance Proposal is approved 

by the Commission.26

Pursuant to the proposal, ownership 

interests in BSTX are represented by 

two classes of units (‘‘Units’’): Class A 

Units, which represent equal units of 

limited liability interest in BSTX, 

including an interest in the ownership 

and profits and losses of BSTX and the 

right to receive distributions from BSTX 

as set forth in the BSTX LLC Agreement 

(‘‘Class A Units’’); and Class B Units, 

which are generally identical to the 

Class A Units, except that they do not 

have the right to vote on any matter 

related to BSTX (‘‘Class B Units’’).27

According to the Exchange, 50% of the 

voting Class A Units are owned by BOX 

Digital, which is 98% owned by BOX 

Holdings, and the other 50% of the 

voting Class A Units are owned by 

tZERO.28 According to the Exchange, 

BOX Digital and tZERO each have over 

a 45% economic interest in BSTX, and 

the non-voting Class B Units are held by 

various employees and directors of 

BSTX, each of whom hold less than a 

5% economic interest in BSTX.29

Holders of Units are referred to as 

‘‘Members’’ of BSTX (‘‘BSTX LLC 

Members’’).30 The Exchange also states 

that BSTX is an affiliate of the Exchange 

and, if approved as a facility of the 

Exchange, will be subject to regulatory 

oversight by the Exchange.31

The Exchange states that BOX 

Holdings wholly owns BOX Options, 

which is a facility of the Exchange 32

and the only facility that the Exchange 

currently operates.33 According to the 

Exchange, the BSTX LLC Agreement 

provisions are generally the same as 


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34See Notice, supra note 3, 85 FR at 33259, n.8 

and accompanying text. 

35See id. at 33259. The Exchange will also 

provide certain business services to BSTX pursuant 

to an administrative services agreement. See id. 

36See id. at 33261. 

37See id. at 33266. The Facility Agreement, 

administrative services agreement, and LSA were 

not provided as exhibits to the proposal. 

38See Notice, supra note 3, 85 FR at 33260, 

33267; BSTX LLC Agreement, supra note 14, 

Section 7.4(g). The Exchange specifically identifies 

certain upstream owners that would be required to 

execute such an amendment. See Notice, supra note 

3, 85 FR at 33260. 

39BSTX LLC Agreement defines ‘‘BSTX 

Participant’’ as a firm or organization that is 

registered with the Exchange pursuant to Exchange 

rules for purposes of participating in trading on the 

BSTX Market as an order flow provider or market 

maker. See BSTX LLC Agreement, supra note 14, 

Section 1.1. 

40See Notice, supra note 3, 85 FR at 33260; BSTX 

LLC Agreement, supra note 14, Section 7.4(h). 

According to the Exchange, this limitation is 

designed to prevent a market participant from 

exerting undue influence on an Exchange facility, 

and in particular is designed to minimize the ability 

of a BSTX Participant to improperly interfere with 

or restrict the ability of the Exchange to effectively 

carry out its regulatory oversight responsibilities 

under the Exchange Act. See Notice, supra note 3, 

85 FR at 33260. 

41See e.g., Notice, supra note 3, 85 FR at 33261– 

62, 33268. Section 3.2(a)(i) of the proposed BSTX 

LLC Agreement, for example, which according to 

the Exchange is identical in substance to a 

provision in the BOX Options LLC Agreement, 

provides that the Exchange has authority to act as 

the ‘‘SRO for BSTX Market,’’ will ‘‘provide the 

regulatory framework for the BSTX Market’’ and 

will have ‘‘regulatory responsibility for the 

activities of the BSTX Market.’’ See Notice, supra 

note 3, 85 FR at 33262; BSTX LLC Agreement, 

supra note 14, Section 3.2(a)(i). It also provides that 

the Exchange will ‘‘provide regulatory services to 

BSTX pursuant to the Facility Agreement,’’ and that 

nothing in the LLC Agreement ‘‘shall be construed 

to prevent the Exchange from allowing BSTX to 

perform activities that support the regulatory 

framework for the BSTX Market, subject to 

oversight by the Exchange.’’ See Notice, supra note 

3, 85 FR at 33262; BSTX LLC Agreement, supra 

note 14, Section 3.2(a)(i). 

42See Notice, supra note 3, 85 FR at 33261–62; 

BSTX LLC Agreement, supra note 14, Sections 

4.12(a), (c). The BSTX LLC Agreement also includes 

provisions, which the Exchange states are 

substantively similar to provisions in the BOX 

Options LLC Agreement, that address the handling 

of confidential information, both pertaining to 

regulatory matters and otherwise (see Notice, supra 

note 3, 85 FR at 33268–69; BSTX LLC Agreement, 

supra note 14, Article 15); and provisions, which 

the Exchange states are substantially similar to 

those of the BOX Options LLC Agreement, related 

to regulatory jurisdiction over BSTX LLC Members; 

the maintenance of books and records; and the 

independence of the self-regulatory function of the 

Exchange and compliance with federal securities 

laws. See Notice, supra note 3, 85 FR at 33269; 

BSTX LLC Agreement, supra note 14, Sections 4.12, 

11.1, 18.6(a), and 18.6(c). 

43See Notice, supra note 3, 85 FR at 33259. 

44See Notice, supra note 3, 85 FR at 33264; BSTX 

LLC Agreement, supra note 14, Section 3.2(a)(ii). 

45The BSTX LLC Agreement defines ‘‘Regulatory 

Deficiency’’ as the operation of BSTX (in 

connection with matters that are not Non-Market 

Matters) or the BSTX Market (including, but not 

limited to, the BSTX System) in a manner that is 

not consistent with the Exchange rules and/or the 

Commission rules governing the BSTX Market or 

BSTX Participants, or that otherwise impedes the 

Exchange’s ability to regulate the BSTX Market or 

BSTX Participants or to fulfill its obligations under 

the Exchange Act as an SRO. See BSTX LLC 

Agreement, supra note 14, Section 1.1. ‘‘NonMarket Matters’’ means changes related solely to 

one or more of the following: Marketing, 

administrative matters, personal matters, social or 

team-building events, meetings of the BSTX LLC 

Members, communication with the BSTX LLC 

Members, finance, location and timing of the Board 

meetings, market research, real property, 

equipment, furnishings, personal property, 

intellectual property, insurance, contracts unrelated 

to the operation of the BSTX Market and de 

minimis items. See BSTX LLC Agreement, supra 

note 14, Section 3.2(a)(ii). See also infra note 51 

(defining ‘‘BSTX System’’). 

46See Notice, supra note 3, 85 FR at 33264; BSTX 

LLC Agreement, supra note 14, Section 3.2(a)(iii). 

47See, e.g., Notice, supra note 3, 85 FR at 33264– 

66; BSTX LLC Agreement, supra note 14, Sections 

6.1, 6.2, and 8.1, and 8.2. 

48See Amendment No. 1 Form 19b-4, supra note 

6, at 5 (citing the BOX–2020–04 Approval, see 

supra note 15). 

49See Notice, supra note 3, 85 FR at 33259. 

50See supra note 25 and accompanying text. 

51See BSTX Trading Rules Proposal, supra note 

16, 85 FR 51251. The BSTX Rules would have 

defined the ‘‘Securities’’ that would be traded on 

BSTX as a facility of the Exchange as ‘‘NMS stock, 

as defined in Rule 600(b)(47) of the Exchange Act, 

trading on the BSTX System and for which 

ancillary Ethereum blockchain records are 

maintained under [the BSTX Rules]’’; and the BSTX 

System as the ‘‘the automated trading system used 

by BSTX for the trading of Securities.’’ See BSTX 

Rules, supra note 24, Rules 17000(a)(30) and (14), 

respectively. Exchange Act Rule 600(b)(47) defines 

‘‘NMS security’’ as ‘‘any security or class of 

securities for which transaction reports are 

Continued 

provisions of the BOX Options LLC 

Agreement or the BOX Holdings LLC 

Agreement.34 The Exchange states that it 

will enter into a Facility Agreement 

with BSTX pursuant to which the 

Exchange will exercise regulatory 

oversight over BSTX.35 Furthermore, the 

Exchange has entered into an IP License 

and Services Agreement (‘‘LSA’’) with 

tZERO,36 under which tZERO will 

provide BSTX and the Exchange with a 

license to use its intellectual property 

that comprises the BSTX trading system 

and services related to, among other 

things, implementing and maintain the 

trading system.37

Pursuant to the BSTX LLC Agreement, 

a person that establishes an indirect 

ownership interest in BSTX that meets 

certain thresholds would be required to 

become a party to the BSTX LLC 

Agreement, by executing an amendment 

to the BSTX LLC Agreement, and abide 

by its provisions to the same extent as 

if they were a BSTX LLC Member.38 The 

Exchange further proposes that any 

BSTX Participant 39 that directly or 

indirectly together with its Related 

Persons holds more than 20% of BSTX 

would have its voting power capped at 

20%.40

The Exchange states that the BSTX 

LLC Agreement includes provisions 

designed to prevent any owner of BSTX 

from having undue influence over 

regulatory actions and ensure that the 

Exchange has full regulatory control 

over BSTX and these provisions.41

These provisions, which according to 

the Exchange are the same provisions 

that are contained in the BOX Options 

LLC Agreement, include provisions that 

would require each of the BSTX LLC 

Members and the directors, officers, 

employees and agents of BSTX to give 

due regard to the preservation of the 

independence of the self-regulatory 

function of the Exchange and cooperate 

with the Exchange pursuant to its 

regulatory authority and with the 

Commission.42 The Exchange also states 

that the Exchange’s powers and 

authority under the Facility Agreement 

ensure that the Exchange has full 

regulatory control over BSTX, which is 

designed to prevent any owner of BSTX 

from exercising undue influence over 

the regulated activities of BSTX.43

The BSTX LLC Agreement provides 

that the Exchange shall receive notice of 

planned or proposed changes to BSTX, 

with the exception of certain changes 

not related to the operation of the 

market, or to the BSTX Market, and that 

such changes will require affirmative 

approval by the Exchange before 

implementation.44 If the Exchange 

determines that planned or proposed 

changes could cause a ‘‘Regulatory 

Deficiency,’’ 45 the Exchange may direct 

BSTX, subject to Board approval, to 

modify the proposal as necessary.46

Further, in the BSTX Governance 

Proposal the Exchange proposes how 

regulatory funds may be allocated and 

provisions regarding capital 

contributions and distributions.47 The 

Exchange also states that it submitted a 

separate filing to introduce structural 

changes to the Exchange to 

accommodate regulation of BSTX as 

well as BOX Options, which was 

approved by the Commission.48

According to the Exchange, BSTX 

Participants will have the same 

representation, rights, and 

responsibilities as BOX Options 

Participants.49

Additionally, as described above, the 

Exchange proposes that without 

Commission approval of the BSTX 

Trading Rules Proposal, it would not 

permit BSTX to commence operations of 

the BSTX Market.50 Pursuant to the 

BSTX Trading Rules Proposal, the 

Exchange proposed to operate a fully 

automated, price/time priority 

execution system for the listing and 

trading of securities (‘‘BSTX 

Securities’’).51 BSTX Securities would 


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collected, processed, and made available pursuant 

to an effective transaction reporting plan, or an 

effective national market system plan for reporting 

transactions in listed options.’’ 17 CFR 

242.600(b)(47). Exchange Act Rule 600(b)(48) then 

defines ‘‘NMS stock’’ as ‘‘any NMS security other 

than an option.’’ 17 CFR 242.600(b)(48). The BSTX 

LLC Agreement defines ‘‘System’’ as ‘‘the 

technology, know-how, software, equipment, 

communication lines or services, services and other 

deliverables or materials of any kind as may be 

necessary or desirable for the operation of the BSTX 

Market.’’ See BSTX LLC Agreement, supra note 14, 

Section 1.1. 

52The BSTX LLC Agreement defines ‘‘BSTX 

Participant’’ as ‘‘a firm or organization that is 

registered with the Exchange pursuant to Exchange 

Rules for purposes of participating in Trading on 

the BSTX Market.’’ See BSTX LLC Agreement, 

supra note 14, Section 1.1. The proposed trading 

rules would have defined ‘‘BSTX Participant’’ as ‘‘a 

Participant or Options Participant (as defined in 

[Exchange] Rule 100 Series) that is authorized to 

trade Securities on the Exchange.’’ See BSTX Rules, 

supra note 24, Rule 17000(a)(11). 

53See BSTX Trading Rules Proposal, supra note 

16, 85 FR at 51256, 51258–62. 

54See BSTX Trading Rules Disapproval, supra 

note 17. 

55See BSTX Rules, supra note 24, Rule 26000 

Series and 27000 Series; BSTX Trading Rules 

Proposal, supra note 16, 85 FR at 51277–81. 

56See BSTX Rules, supra note 24, Rule 26000 

Series; BSTX Trading Rules Proposal, supra note 

16, 85 FR at 51277–80. 

57See BSTX Rules, supra note 24, Rule 27000 

Series; BSTX Trading Rules Proposal, supra note 

16, 85 FR at 51280. 

58See BSTX Trading Rules Proposal, supra note 

16, 85 FR at 51283–85. The proposed forms for 

issuers to list on BSTX were attached as Exhibits 

3G through 3M to the 19b–4 for SR–BOX–2020–14 

(available on the Commission’s website at https:// 

www.sec.gov/rules/sro/box.htm#SR-BOX-2020-14). 

59See supra note 52. 

60See BSTX Rules, supra note 24, Rule 18000 

Series; BSTX Trading Rules Proposal, supra note 

16, 85 FR at 51264–65. 

61See BSTX Trading Rules Proposal, supra note 

16, 85 FR at 51283. The proposed forms for issuers 

to list on BSTX were attached as Exhibits 3A 

through 3F to the 19b–4 for SR–BOX–2020–14 

(available on the Commission’s website at https:// 

www.sec.gov/rules/sro/box.htm#SR-BOX-2020-14). 

62See BSTX Rules, supra note 24, Rule 19000 

Series, 20000 Series, and 23000 Series; BSTX 

Trading Rules Proposal, supra note 16, 85 FR at 

51265–68. 

63See BSTX Rules, supra note 24, Rule 25000 

Series; BSTX Trading Rules Proposal, supra note 

16, 85 FR at 51268–75. 

64See BSTX Rules, supra note 24, Rule 17020; 

BSTX Trading Rules Proposal, supra note 16, 85 FR 

at 51258–62. 

65See BSTX Rules, supra note 24, Rule 22040; 

BSTX Trading Rules Proposal, supra note 16, 85 FR 

at 51267, 51286–87. 

66See 15 U.S.C. 78s(b)(2)(C)(i). 

67Rule 700(b)(3), Commission Rules of Practice, 

17 CFR 201.700(b)(3). 

68See id. 

69See id. 

70Susquehanna Int’l Group, LLP v. Securities and 

Exchange Commission, 866 F.3d 442, 447 (D.C. Cir. 

2017). 

71Other than as discussed below, this Order 

makes no findings with respect to whether other 

aspects of the proposed rule change are consistent 

with the Exchange Act. 

be NMS stock, and members approved 

for trading on BSTX (i.e., BSTX 

Participants),52 and issuers of BSTX 

Securities, would be required to comply 

with a protocol to enable BSTX to 

record and publicly disseminate digital 

representations of end-of-day ownership 

balances to the Ethereum blockchain.53

Specifically, in the BSTX Trading Rules 

Proposal, which the Commission 

disapproved,54 the Exchange proposed: 

• Rules for which securities could be 

listed and traded on the BSTX Market,55

including: 

• rules governing listing on BSTX, 

such as initial listing standards; 56

• rules governing suspension and 

delisting; 57 and 

• forms to be used by issuers 

applying to list on BSTX; 58

• rules governing the process for and 

eligibility to become a BSTX 

Participant, as well as ongoing 

obligations, including: 

• Rules defining BSTX Participant; 59

• rules setting forth requirements to 

participation on BSTX; 60

• agreements and forms required to 

become a BSTX Participant; 61 and 

• rules governing business conduct, 

trading practice, financial responsibility 

for BSTX Participants; 62

• rules for trading on the BSTX 

Market and access to the BSTX 

System; 63

• rules for BSTX Participants and the 

Exchange requiring reporting of end-ofday balance information of BSTX 

Participants in BSTX Securities to the 

Exchange for recording to the Ethereum 

blockchain; 64 and 

• rules for how the Exchange would 

satisfy its regulatory obligations 

(including by extending its existing 

Regulatory Services Agreement (‘‘RSA’’) 

with the Financial Industry Regulatory 

Authority (‘‘FINRA’’) to cover BSTX 

Participants).65

III. Discussion and Commission Finding 

A. Applicable Standard of Review 

Under Section 19(b)(2)(C) of the 

Exchange Act, the Commission must 

approve the proposed rule change of a 

self-regulatory organization (‘‘SRO’’) if 

the Commission finds that the proposed 

rule change is consistent with the 

requirements of the Exchange Act and 

the applicable rules and regulations 

thereunder; if it does not make such a 

finding, the Commission must 

disapprove the proposed rule change.66

Additionally, under Rule 700(b)(3) of 

the Commission’s Rules of Practice, the 

‘‘burden to demonstrate that a proposed 

rule change is consistent with the 

Exchange Act and the rules and 

regulations issued thereunder . . . is on 

the self-regulatory organization that 

proposed the rule change.’’ 67 The 

description of a proposed rule change, 

its purpose and operation, its effect, and 

a legal analysis of its consistency with 

applicable requirements must be 

sufficiently detailed and specific to 

support an affirmative Commission 

finding.68 Any failure of an SRO to 

provide this information may result in 

the Commission not having a sufficient 

basis to make an affirmative finding that 

a proposed rule change is consistent 

with the Exchange Act and the 

applicable rules and regulations issued 

thereunder that are applicable to the 

SRO.69 Moreover, ‘‘unquestioning 

reliance’’ on an SRO’s representations in 

a proposed rule change is not sufficient 

to justify Commission approval of a 

proposed rule change.70

As discussed throughout, the rules for 

operation of the BSTX Market proposed 

in the BSTX Trading Rules Proposal 

undergird the operation and governance 

of BSTX as a facility of the Exchange. 

Those listing and trading rules, which 

are cited and relied upon by the 

Exchange in the BSTX Governance 

Proposal, were disapproved by the 

Commission and, as a result, the BSTX 

Governance Proposal, standing alone, 

does not reflect the proposed operations 

of the BSTX facility. Given that the rules 

for the BSTX facility were not approved, 

and BOX relied on those rules in the 

BSTX Governance Proposal with respect 

to how BSTX would operate the BSTX 

market and the Exchange would provide 

regulatory oversight of BSTX, the 

Commission is unable to assess the 

scope of the Exchange’s regulatory 

operations, and therefore cannot find 

that the BSTX Governance Proposal is 

consistent with the Exchange Act, and 

in particular Section 6(b)(1). For these 

reasons, the Commission is unable to 

find that the Exchange has met its 

burden to show that the proposed rule 

change is consistent with the Exchange 

Act and the applicable rules and 

regulations thereunder, and in 

particular Exchange Act Section 6(b)(1), 

and is therefore unable to find that the 

proposal is consistent with the 

Exchange Act.71

B. Whether the Record Supports a 

Finding That the Proposal is Consistent 

With Section 6(b)(1) of the Exchange Act 

With the BSTX Governance Proposal, 

the Exchange proposes to establish 

BSTX as a facility of the Exchange and 

proposes the BSTX LLC Agreement as 

the source of operating and governance 

authority for BSTX. The Exchange rules 

that would have governed operation of 

the BSTX Market, and established many 


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72See supra note 17 and accompanying text. 

73See supra notes 24–25 and accompanying text. 

74See BSTX LLC Agreement, supra note 14, 

Section 1.1. 

75The BSTX LLC Agreement defines ‘‘BSTX 

Products’’ as ‘‘security tokens (emphasis added) 

authorized for trading on the BSTX Market.’’ See id. 

at Section 1.1. 

76See BSTX LLC Agreement, supra note 14, 

Section 3. 

77See supra note 51 and accompanying text. 

78See supra note 74 and accompanying text. 

79The proposed BSTX LLC Agreement defines 

‘‘Trading’’ as ‘‘availability of the System to 

authorized users for entering, modifying and 

canceling orders in BSTX Products.’’ See BSTX LLC 

Agreement, supra note 14, Section 1.1. 

80See supra note 75 and accompanying text. 

81See supra notes 55–65 and accompanying text. 

82See supra note 55 and accompanying text. 

83See e.g., BSTX Trading Rules Proposal, supra 

note 16, 85 FR at 51257; BSTX Rules, supra note 

24, proposed BSTX Rule 17020(d). 

84See supra note 23 and accompanying text. 

85See supra note 75. 

86See BSTX LLC Agreement, supra note 14, 

Section 1.1. 

87See id. 

88See supra notes 59–62 and accompanying text. 

89See BSTX LLC Agreement, supra note 14, 

Section 3.2(a)(i); supra note 41. 

90See BSTX LLC Agreement, supra note 14, 

Section 18.8. 

of the Exchange’s obligations as an SRO 

with respect to BSTX as a facility of the 

Exchange, were the subject of a separate 

proposed rule change—the BSTX 

Trading Rules Proposal—that the 

Commission disapproved.72 In the 

BSTX Governance Proposal, the 

Exchange cites the BSTX Trading Rules 

Proposal and states that it would not 

commence operations of the BSTX 

Market until the BSTX Trading Rules 

Proposal is approved by the 

Commission.73 Many aspects of the 

BSTX Governance Proposal and many 

provisions of the BSTX LLC Agreement, 

however, are substantively relevant only 

in the context of the existence and 

operation of the BSTX Market, and in 

the absence of the BSTX Trading Rules 

Proposal, the Commission is unable to 

assess these provisions and determine 

that the Exchange would be organized 

and have the capacity to carry out the 

purposes of the Exchange Act, 

consistent with Section 6(b)(1) of the 

Exchange Act. 

For example, in the BSTX LLC 

Agreement the Exchange defines the 

BSTX Market as ‘‘the market operated 

by BSTX pursuant to Section 3.1 [of the 

BSTX LLC Agreement],’’ 74 and Section 

3.1 of the BSTX LLC Agreement states 

that the purpose of BSTX is to ‘‘develop 

the System, to own and operate the 

BSTX Market for the Trading of BSTX 

Products,75 and to engage in all related 

activities arising therefrom or relating 

thereto or necessary, desirable, 

advisable, convenient, or appropriate in 

connection therewith as the [BSTX] LLC 

Members may determine.’’ 76 And while 

the BSTX LLC Agreement generally 

defines the terms System,77 BSTX 

Market,78 Trading,79 and BSTX 

Products,80 the BSTX Governance 

Proposal and the BSTX LLC Agreement 

do not describe the proposed operation 

of the BSTX Market, how trading would 

occur on the BSTX Market, or the 

products proposed to be traded on the 

BSTX Market. Instead, the proposed 

rules for, and the description of, these 

aspects of the proposed facility were the 

subject of the BSTX Trading Rules 

Proposal.81

In particular, the securities that are 

proposed to be traded on BSTX are 

described in the BSTX Governance 

Proposal only as ‘‘securities,’’ but are 

defined in the BSTX LLC Agreement as 

‘‘BSTX Products,’’ which are ‘‘security 

tokens’’ authorized for trading on the 

BSTX Market. And the Exchange does 

not further explain BSTX Products. The 

BSTX Trading Rules Proposal, however, 

proposed rules governing what 

securities could be listed and traded on 

BSTX,82 and explained how securities 

listed and traded on BSTX would be 

represented on the Ethereum blockchain 

as ‘‘tokenized assets,’’ a characteristic 

which would distinguish them from 

other NMS stocks.83 In the absence of 

the BSTX Trading Rules Proposal, the 

BSTX Governance Proposal does not 

sufficiently explain what kinds of 

securities would be listed and traded on 

BSTX, including what the Exchange 

intends by the term ‘‘security tokens.’’ 

Furthermore, the Exchange states in the 

BSTX Governance Proposal that BSTX 

will be a ‘‘facility of the Exchange that 

operates a market for the trading of 

securities’’ 84 and the BSTX LLC 

Agreement defines the products to be 

traded on the facility as ‘‘authorized for 

Trading on the BSTX Market.’’ 85 As 

noted above, the Commission 

disapproved the rules that would have 

established this authority. 

Similarly, the BSTX Governance 

Proposal does not sufficiently explain 

who would be a member of the 

Exchange that is eligible to trade on 

BSTX and qualify as a BSTX 

Participant. The BSTX LLC Agreement 

defines BSTX Participant as ‘‘a firm or 

organization that is registered with the 

Exchange pursuant to Exchange Rules 

for purposes of participating in Trading 

on the BSTX Market,’’ 86 and ‘‘Exchange 

Rules’’ as ‘‘the rules of the Exchange 

that constitute the ‘rules of an exchange’ 

within the meaning of Section 3 of the 

Exchange Act, and that pertain to the 

BSTX Market.’’ 87 However, the BSTX 

Governance Proposal does not provide 

the rules for and eligibility to become a 

BSTX Participant, as well as ongoing 

obligations. Those were proposed in the 

BSTX Trading Rules Proposal.88 The 

BSTX Governance Proposal does not 

sufficiently establish what the 

‘‘Exchange Rules’’ referred to in that 

proposal are, the extent of their 

application, and what they would 

require of BSTX members. 

In addition, the BSTX LLC Agreement 

states that the Exchange will have 

regulatory responsibility for the 

activities of the BSTX Market. But the 

Exchange also states that it will only 

commence operations of the BSTX 

Market if the BSTX Trading Rules 

Proposal is approved. Additionally, as 

described above, the BSTX Governance 

Proposal does not provide information 

about the proposed operations of BSTX 

as a facility. As a result, it is not clear 

what the activities of the BSTX Market 

would be, over which the Exchange 

would exercise regulatory 

responsibility. For example, Section 3.2 

of the BSTX LLC Agreement provides 

that the Exchange will (a) act as the 

Commission approved SRO for the 

BSTX Market, (b) have regulatory 

responsibility for the activities of the 

BSTX Market, and (c) provide regulatory 

services to BSTX pursuant to the 

Facility Agreement.89 The BSTX LLC 

Agreement also states that the Exchange 

will become a party to the BSTX LLC 

Agreement and the Commission and the 

Exchange shall have ‘‘appropriate 

regulatory oversight responsibilities 

with respect to BSTX’’ upon the 

Commission’s approval of the 

Exchange’s proposal to operate the 

BSTX Market as a facility of the 

Exchange.90 Because the BSTX 

Governance Proposal does not explain 

how the BSTX Market would operate, 

the Commission is unable to assess what 

the Exchange’s regulatory 

responsibilities would be and thus 

whether the Exchange would be 

organized and have the capacity to carry 

out the purposes of the Exchange Act 

with respect to BSTX as a facility of the 

Exchange. 

Furthermore, the BSTX Trading Rules 

Proposal included discussion about how 

the Exchange planned to comply with 

its regulatory obligations with respect to 

the BSTX Market that is not included in 

the BSTX Governance Proposal. For 

example, the BSTX Governance 

Proposal does not explain whether the 

Exchange would enter into any 

agreements with other parties to provide 

regulatory services. However, the BSTX 

Trading Rules Proposal explained that 


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91See BSTX Trading Rules Proposal, supra note 

16, 85 FR at 51286. See also supra note 65 and 

accompanying text. The Exchange also proposed 

that it would perform automated surveillance of 

trading on BSTX for the purpose of maintaining a 

fair and orderly market at all times and monitor 

BSTX to identify unusual trading patterns and 

determine whether particular trading activity 

requires further regulatory investigation by FINRA. 

See BSTX Trading Rules Proposal, supra note 16, 

85 FR at 51286–87. 

92See, e.g., supra notes 41 and 43 and 

accompanying text. 93See BSTX LLC Agreement, supra note 14, 

Section 1.1. See also supra notes 45–46 and 

accompanying text. 

94See Notice, supra note 3, 85 FR at 33264. 

95 15 U.S.C. 78f(b)(1). 

96 15 U.S.C. 78s(b)(2). 

97 17 CFR 200.30–3(a)(57). 

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

2 17 CFR 240.19b–4. 

3The Commission notes that the Exchange 

initially filed the proposed Fee Schedule 

amendment on December 31, 2020 (SR–MIAX– 

2020–43). On January 13, 2021, the Exchange 

withdrew that filing and submitted this filing. 

4The term ‘‘Member’’ means an individual or 

organization approved to exercise the trading rights 

associated with a Trading Permit. Members are 

deemed ‘‘members’’ under the Exchange Act. See 

Exchange Rule 100. 

in connection with the operation of 

BSTX, the Exchange planned to leverage 

many of the structures it previously 

established to operate a national 

securities exchange in compliance with 

Section 6 of the Exchange Act. The 

Exchange stated, among other things, its 

intent to extend its RSA with FINRA to 

cover BSTX Participants and trading on 

the BSTX System; that the RSA would 

govern many aspects of the regulation 

and discipline of BSTX Participants; 

and that the Exchange would perform 

Security listing regulation, authorize 

BSTX Participants to trade on the BSTX 

System, and conduct surveillance of 

Security trading on the BSTX System.91

The BSTX Trading Rules Proposal was 

disapproved, and this information, 

which is supportive of how the 

Exchange would be organized and have 

the capacity to carry out the purposes of 

the Exchange Act, is not part of the 

BSTX Governance Proposal. Because the 

BSTX Governance Proposal, standing 

alone, does not reflect these aspects of 

the operation of the BSTX facility or 

how the Exchange would provide 

regulatory oversight of BSTX, the 

Commission is unable to assess whether 

the BSTX Governance Proposal is 

consistent with Section 6(b)(1) of the 

Exchange Act. 

In other regards, the BSTX LLC 

Agreement also refers to the Exchange’s 

regulatory authority with respect to 

BSTX.92 For example, the BSTX LLC 

Agreement gives the Exchange the 

authority and discretion to take actions 

to limit or prevent a ‘‘Regulatory 

Deficiency,’’ which the BSTX LLC 

Agreement defines as the operation of 

BSTX or the BSTX Market in a manner 

that is not consistent with Exchange 

Rules or the Exchange Act, or rules and 

regulations thereunder, governing the 

BSTX Market or BSTX Participants, or 

that otherwise impedes the Exchange’s 

ability to regulate the BSTX Market or 

BSTX Participants or to fulfill its 

obligations under the Exchange Act as 

an SRO.93 The Exchange states that such 

provisions ensure the Exchange 

maintains full regulatory control and 

authority over BSTX while it operates as 

a facility of the Exchange and help 

guarantee the Exchange’s ability to 

fulfill its regulatory responsibilities and 

operate in a manner consistent with the 

Exchange Act, and in particular with 

Section 6(b)(1).94 However, the BSTX 

Governance Proposal does not provide 

sufficient detail about how the BSTX 

Market would operate, and the 

Commission concludes that the 

information in the BSTX Governance 

Proposal on its own cannot support a 

finding that the Exchange will be 

organized and have the capacity to 

comply with the purposes of the 

Exchange Act, consistent with Section 

6(b)(1) of the Exchange Act. 

IV. Conclusion 

For the reasons set forth above, the 

Commission does not find, pursuant to 

Section 19(b)(2) of the Exchange Act, 

that the proposed rule change, as 

modified by Amendment No. 1, is 

consistent with the requirements of the 

Exchange Act and the rules and 

regulations thereunder applicable to a 

national securities exchange, and, in 

particular, with Section 6(b)(1) of the 

Exchange Act.95

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Exchange Act,96

that the proposed rule change (SR– 

BOX–2020–16), as modified by 

Amendment No. 1, be, and hereby is, 

disapproved. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.97

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–01943 Filed 1–28–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–90980; File No. SR–MIAX– 

2021–02] 

Self-Regulatory Organizations; Miami 

International Securities Exchange LLC; 

Notice of Filing and Immediate 

Effectiveness of a Proposed Rule 

Change To Amend Its Fee Schedule for 

Member and Non-Member Monthly 

Network Connectivity Fees 

January 25, 2021. 

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 January 

13, 2021, Miami International Securities 

Exchange LLC (‘‘MIAX’’ or ‘‘Exchange’’) 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) a 

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 is filing a proposal to 

amend the MIAX Fee Schedule (the 

‘‘Fee Schedule’’).3

The text of the proposed rule change 

is available on the Exchange’s website at 

http://www.miaxoptions.com/rulefilings, at MIAX’s principal office, 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 

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 the 

Fee Schedule to increase the Exchange’s 

network connectivity fees for its 10 

gigabit (‘‘Gb’’) ultra-low latency (‘‘ULL’’) 

fiber connection for Members 4 and nonMembers (the ‘‘Proposed Access Fees’’). 

The Exchange currently offers various 

bandwidth alternatives for connectivity 

to the Exchange, to its primary and 

secondary facilities, consisting of a 1Gb 

fiber connection, a 10Gb fiber 


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