Federal Register / Vol. 83, No. 176 / Tuesday, September 11, 2018 / Notices 46003 

15 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. 83367 

(June 4, 2018), 83 FR 26719 (‘‘Notice’’). 

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

5See Securities Exchange Act Release No. 83647, 

83 FR 34635 (July 20, 2018). The Commission 

designated September 6, 2018, as the date by which 

the Commission shall approve or disapprove, or 

institute proceedings to determine whether to 

approve or disapprove, the proposed rule change. 

6 15 U.S.C. 78s(b)(2)(B). 

7A Complex Customer Cross Order is comprised 

of one Public Customer Complex Order to buy and 

one Public Customer Complex Order to sell at the 

same price and for the same quantity. See proposed 

BOX Rule 7240(b)(4)(iii). 

8A Complex QCC Order is comprised of an 

originating Complex Order to buy or sell where 

each component is at least 1,000 contracts that is 

identified as being part of a qualified contingent 

trade, as defined in IM–7110–2, coupled with a 

contra-side Complex Order or orders totaling an 

equal number of contracts. See proposed BOX Rule 

7240(b)(4)(iv). A ‘‘qualified contingent trade’’ is a 

transaction consisting of two or more component 

orders, executed as agent or principal, where: (1) At 

least one component is an NMS Stock, as defined 

in Rule 600 of Regulation NMS under the Exchange 

Act; (2) all components are effected with a product 

or price contingency that either has been agreed to 

by all the respective counterparties or arranged for 

by a broker-dealer as principal or agent; (3) the 

execution of one component is contingent upon the 

execution of all other components at or near the 

same time; (4) the specific relationship between the 

component orders (e.g., the spread between the 

prices of the component orders) is determined by 

the time the contingent order is placed; (5) the 

component orders bear a derivative relationship to 

one another, represent different classes of shares of 

the same issuer, or involve the securities of 

participants in mergers or with intentions to merge 

that have been announced or cancelled; and (6) the 

transaction is fully hedged (without regard to any 

prior existing position) as a result of other 

components of the contingent trade. See BOX IM– 

7110–2. See Notice, supra note 3, for additional 

description of the proposed rule change, including 

examples demonstrating the operation of the 

proposed Complex Customer Cross and Complex 

QCC Orders. 

9See proposed BOX IM–7240–1(a)(5) and (b)(5). 

10The cBBO is the best net bid and offer price 

for a Complex Order Strategy based on the BBO on 

the BOX Book for the individual options 

components of the Strategy. See BOX Rule 

7240(a)(1). The BOX Book is the electronic book of 

orders on each single option series maintained by 

the BOX Trading Host. See BOX Rule 100(a)(10). 

11The cNBBO is the best net bid and offer price 

for a Complex Order Strategy based on the NBBO 

for the individual options components of the 

Strategy. See BOX Rule 7240(a)(3). 

12See proposed BOX Rule 7110(c)(7). 

13See proposed BOX Rule 7110(c)(7)(i) and (ii). 

14See proposed BOX Rule 7110(c)(7)(iii). BOX 

IM–7140–1 provides: ‘‘[BOX Rule 7140(b)] prevents 

an Options Participant executing agency orders to 

increase its economic gain from trading against the 

order without first giving other trading interest on 

BOX an opportunity to trade with the agency order 

pursuant to Rule 7150 (Price Improvement Period), 

Rule 7245 (Complex Order Price Improvement 

Period) or Rule 7270 (Block Trades). However, the 

Exchange recognizes that it may be possible for an 

Options Participant to establish a relationship with 

a Customer or other person (including affiliates) to 

deny agency orders the opportunity to interact on 

BOX and to realize similar economic benefits as it 

would achieve by executing agency orders as 

principal. It will be a violation of [BOX Rule 

7140(b)] for an Options Participant to circumvent 

[BOX Rule 7140(b)] by providing an opportunity for 

a Customer or other person (including affiliates) to 

Continued 

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 

a.m. and 3 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–Phlx– 

2018–57 and should be submitted on or 

before October 2, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–19641 Filed 9–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84031; File No. SR–BOX– 

2018–14] 

Self-Regulatory Organizations; BOX 

Options Exchange LLC; Order 

Instituting Proceedings To Determine 

Whether To Approve or Disapprove a 

Proposed Rule Change To Adopt Rules 

Governing the Trading of Complex 

Qualified Contingent Cross Orders and 

Complex Customer Cross Orders 

September 5, 2018. 

I. Introduction 

On May 22, 2018, BOX Options 

Exchange LLC (‘‘BOX’’ or the 

‘‘Exchange’’) 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 

adopt rules governing the trading of 

Complex Qualified Contingent Cross 

Orders (‘‘QCC’’) and Complex Customer 

Cross Orders. The proposed rule change 

was published for comment in the 

Federal Register on June 8, 2018.3 On 

July 16, 2018, pursuant to Section 

19(b)(2) of the 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 approve or disapprove the 

proposed rule change.5 The Commission 

has received no comment letters 

regarding the proposed rule change. 

This order institutes proceedings 

pursuant to Section 19(b)(2)(B) of the 

Act 6 to determine whether to approve 

or disapprove the proposed rule change. 

II. Description of the Proposal 

BOX has proposed to adopt rules 

governing the trading of Complex 

Customer Cross Orders 7 and Complex 

QCC Orders.8 The proposal also applies 

two existing Complex Order price 

protections, the debit/credit check and 

the maximum price protection, to the 

proposed Complex Customer Cross and 

Complex QCC Orders.9

Proposed BOX Rule 7110(c)(7) 

provides that a Complex Customer Cross 

order will be executed automatically 

upon entry provided that the execution 

(i) is at least $0.01 better than (inside) 

the cBBO 10 and any Public Customer 

Complex Order on the Complex Order 

Book; (ii) is at or better than any nonPublic Customer Complex Order on the 

Complex Order Book; and (iii) is at or 

between the cNBBO.11 The system will 

reject a Complex Customer Cross Order 

if, at the time of receipt of the Complex 

Customer Cross Order: (i) The strategy is 

subject to an ongoing auction (including 

the COPIP, Facilitation, and Solicitation 

auctions); or (ii) there is an exposed 

order on the strategy pursuant to BOX 

Rule 7240(b)(3)(B).12 Complex Customer 

Cross Orders will be cancelled 

automatically if they cannot be 

executed, and Complex Customer Cross 

Orders may only be entered in the 

minimum trading increments applicable 

to Complex Orders under BOX Rule 

7240(b)(1).13 BOX proposes to apply 

BOX IM–7140–1 to the entry and 

execution of Complex Customer Cross 

Orders.14


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46004 Federal Register / Vol. 83, No. 176 / Tuesday, September 11, 2018 / Notices 

execute against agency orders handled by the 

Options Participant immediately upon their entry 

into the Trading Host.’’ 

15See proposed BOX Rule 7110(c)(8). 

16See proposed BOX Rules 7110(c)(8)(i) and (ii). 

17See Notice, 83 FR at 26722. MIAX Rule 

515(h)(4) provides that Complex Qualified 

Contingent Cross Orders (‘‘cQCC Orders’’) are 

automatically executed upon entry provided that, 

with respect to each option leg of the cQCC Order, 

the execution (i) is not at the same price as a 

Priority Customer Order on the Exchange’s Book; 

and (ii) is at or between the NBBO. 

18See supra note 17. 

19See Notice, 83 FR at 26722. 

20See id. and proposed BOX Rule 7110(c)(8). 

21 15 U.S.C. 78s(b)(2)(B). 

22 Id. 

23See BOX Rule 7245, IM–7270–7, and IM– 

7270–8. 

24 15 U.S.C. 78f(b)(5). 

25 15 U.S.C. 78f(b)(8). 

26 17 CFR 240.19b–4. 

27Section 19(b)(2) of the Act, as amended by the 

Securities Acts Amendments of 1975, Public Law 

94–29 (June 4, 1975), grants to the Commission 

flexibility to determine what type of proceeding— 

either oral or notice and opportunity for written 

comments—is appropriate for consideration of a 

particular proposal by a self-regulatory 

organization. See Securities Acts Amendments of 

1975, Senate Comm. on Banking, Housing & Urban 

BOX also proposes to adopt rules 

governing Complex QCC Orders. 

Proposed BOX Rule 7110(c)(8) provides 

that a Complex QCC Orders will be 

automatically executed upon entry 

provided that the execution (i) is not at 

the same price as a Public Customer 

Complex Order; (ii) is at least $0.01 

better than (inside) the cBBO; (iii) is at 

or better than any non-Public Customer 

Complex on the Complex Order Book; 

and (iv) each option leg executes at or 

between the NBBO. The system will 

reject a Complex QCC Order if, at the 

time of receipt of the Complex QCC 

Order, the strategy is subject to an 

ongoing auction (including COPIP, 

Facilitation, and Solicitation auctions) 

or there is an exposed order on the 

strategy pursuant to BOX Rule 

7240(b)(3)(B).15 Complex QCC Orders 

will be automatically cancelled if they 

cannot be executed, and Complex QCC 

Orders may only be entered in the 

minimum trading increments applicable 

to Complex Orders under BOX Rule 

7240(b)(1).16

BOX acknowledges that, unlike the 

rules of the Miami International 

Securities Exchange, LLC (‘‘MIAX’’), 

BOX’s proposed rules will not require 

that each component leg of a Complex 

QCC Order execute at a price that is 

better than Public Customer Orders on 

the BOX Book.17 Thus, BOX’s proposed 

rule does not provide the same price 

protection for Public Customers as 

MIAX’s Complex QCC rule.18 BOX 

notes, however, that its proposed 

requirement that a Complex QCC Order 

execute at a price that is at least $0.01 

better than the cBBO is consistent with 

BOX’s general approach to Complex 

Orders and that this approach respects 

all interest on the regular Book, not just 

the interest of Public Customers, thereby 

providing a level of protection to all 

Participants.19 BOX further notes that its 

proposal respects resting Complex 

Order interest by requiring a Complex 

QCC Order to execute at a price that is 

better than resting Public Customer 

Complex Orders and the same or better 

than resting non-Public Customer 

Complex Orders.20

III. Proceedings To Determine Whether 

To Approve or Disapprove SR–BOX– 

2018–14 and Grounds for Disapproval 

Under Consideration 

The Commission is instituting 

proceedings pursuant to Section 

19(b)(2)(B) of the Act 21 to determine 

whether the proposed rule change 

should be approved or disapproved. 

Institution of proceedings is appropriate 

at this time in view of the legal and 

policy issues raised by the proposal, as 

discussed below. Institution of 

proceedings does not indicate that the 

Commission has reached any 

conclusions with respect to any of the 

issues involved. Rather, as described 

below, the Commission seeks and 

encourages interested persons to 

provide additional comment on the 

proposed rule change. 

Pursuant to Section 19(b)(2)(B) of the 

Act,22 the Commission is providing 

notice of the grounds for disapproval 

under consideration. BOX proposes to 

allow Complex QCC Orders to be 

automatically executed upon entry 

provided that the execution (i) is not at 

the same price as a Public Customer 

Complex Order; (ii) is at least $0.01 

better than (inside) the cBBO; (iii) is at 

or better than any non-Public Customer 

Complex Order on the Complex Order 

Book; and (iv) each option leg executes 

at or between the NBBO. As discussed 

above, BOX’s proposed rules do not 

require that each component options leg 

of a Complex QCC Order execute at a 

price that is better than resting Public 

Customer interest on the BOX Book. 

Thus, under BOX’s proposal, if there is 

customer interest on the BOX Book at 

the best bid or offer on each component 

leg of a Complex QCC Order, the 

Complex QCC Order would be able to 

trade ahead of resting customer interest 

at the same price on one or more legs 

of the Complex QCC Order. The 

Commission is concerned about 

allowing Complex QCC Orders to 

execute as a ‘‘clean’’ cross ahead of 

resting Public Customer interest on the 

BOX Book. The Commission notes that, 

unlike in BOX’s Complex Order Price 

Improvement Period, Facilitation 

Auction, and Solicitation Auction,23

Public Customer interest on the BOX 

Book would not have an opportunity to 

trade with a Complex QCC Order 

because Complex QCC Orders would be 

executed automatically upon entry. The 

Commission is concerned that Public 

Customers’ inability to participate in a 

Complex QCC transaction, and the 

ability of Complex QCC Orders to trade 

ahead of resting Public Customer 

interest at the same price, would unduly 

disadvantage resting Public Customer 

interest on the BOX Book. 

The Commission is instituting 

proceedings to allow for additional 

analysis of, and input from commenters 

with respect to, the consistency of the 

proposal with Sections 6(b)(5) 24 and 

6(b)(8) 25 of the Act. Section 6(b)(5) of 

the Act requires that the rules of a 

national securities exchange be 

designed, among other things, to 

promote just and equitable principles of 

trade, 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 

not be designed to permit unfair 

discrimination between customers, 

issuers, brokers, or dealers. Section 

6(b)(8) of the Act requires that the rules 

of a national securities exchange not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the Act. 

IV. Procedure: Request for Written 

Comments 

The Commission requests that 

interested persons provide written 

submissions of their data, views, and 

arguments with respect to the issues 

identified above, as well as any other 

concerns they may have with the 

proposal. In particular, the Commission 

invites the written views of interested 

persons concerning whether the 

proposed rule change is consistent with 

Section 6(b)(5), 6(b)(8), or any other 

provisions of the Act, or rules and 

regulations thereunder. Although there 

does not appear to be any issues 

relevant to approval or disapproval 

which would be facilitated by an oral 

presentation of data, views, and 

arguments, the Commission will 

consider, pursuant to Rule 19b–4 under 

the Act,26 any request for an 

opportunity to make an oral 

presentation.27


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 176 / Tuesday, September 11, 2018 / Notices 46005 

Affairs, S. Rep. No. 75, 94th Cong., 1st Sess. 30 

(1975). 

28 17 CFR 200.30–3(a)(12); 17 CFR 200.30– 

3(a)(57). 

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

2 17 CFR 240.19b–4. 

3The Price Discovery Policy uses the term 

‘‘instrument’’ to refer to the complete set of 

contractual terms that affect the value of a CDS 

contract. For single-name CDS contracts, these 

terms include the reference entity, currency, debt 

tier, document clause, coupon, and scheduled 

termination date. 

4Securities Exchange Act Release No. 34–83665 

(July 18, 2018), 83 FR 35048 (July 24, 2018) (SR– 

ICEEU–2018–009) (‘‘Notice’’). 

5Capitalized terms used herein but not otherwise 

defined have the meaning set forth in the ICE Clear 

Europe Clearing Rules, which is available at https:// 

www.theice.com/publicdocs/clear_europe/ 

rulebooks/rules/Clearing_Rules.pdf, or in the Price 

Discovery Policy. 

6Notice, 83 FR at 35049. 

Interested persons are invited to 

submit written data, views, and 

arguments regarding whether the 

proposed rule change should be 

approved or disapproved by October 2, 

2018. Any person who wishes to file a 

rebuttal to any other person’s 

submission must file that rebuttal by 

October 16, 2018. The Commission asks 

that commenters address the sufficiency 

and merit of the Exchange’s statements 

in support of the proposal, in addition 

to any other comments they may wish 

to submit about the proposed rule 

change. 

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 No. SR– 

BOX–2018–14 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 No. 

SR–BOX–2018–14. The 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 

a.m. and 3 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 No. SR–BOX–2018– 

14 and should be submitted by October 

2, 2018. Rebuttal comments should be 

submitted by October 16, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.28

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–19639 Filed 9–10–18; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meetings 

TIME AND DATE: 2:00 p.m. on Thursday, 

September 13, 2018. 

PLACE: Closed Commission Hearing, 

Room 10800. 

STATUS: This meeting will be closed to 

the public. 

MATTERS TO BE CONSIDERED: 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the closed meeting. Certain 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (6), (7), (8), 9(B) 

and (10) and 17 CFR 200.402(a)(3), 

(a)(5), (a)(6), (a)(7), (a)(8), (a)(9)(ii) and 

(a)(10), permit consideration of the 

scheduled matters at the closed meeting. 

Commissioner Peirce, as duty officer, 

voted to consider the items listed for the 

closed meeting in closed session. 

The subject matters of the closed 

meeting will be: 

Institution and settlement of 

injunctive actions; 

Institution and settlement of 

administrative proceedings; 

Resolution of litigation claims; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

CONTACT PERSON FOR MORE INFORMATION: 

For further information and to ascertain 

what, if any, matters have been added, 

deleted or postponed; please contact 

Brent J. Fields from the Office of the 

Secretary at (202) 551–5400. 

Dated: September 6, 2018. 

Brent J. Fields, 

Secretary. 

[FR Doc. 2018–19791 Filed 9–7–18; 11:15 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–84033; File No. SR–ICEEU– 

2018–009] 

Self-Regulatory Organizations; ICE 

Clear Europe Limited; Order Approving 

Proposed Rule Change Relating to 

Amendments to the ICE Clear Europe 

CDS End-of-Day Price Discovery 

Policy (‘‘Price Discovery Policy’’) 

September 5, 2018. 

I. Introduction 

On July 11, 2018, ICE Clear Europe 

Limited (‘‘ICE Clear Europe’’) 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 (SR–ICEEU–2018–009) to revise 

ICE Clear Europe’s CDS End-of-Day 

Price Discovery Policy (‘‘Price Discovery 

Policy’’) related to the bid-offer width 

(‘‘BOW’’) methodology for pricing 

single-name credit default swap 

(‘‘CDS’’) instruments.3 The proposed 

rule change was published for comment 

in the Federal Register on July 24, 

2018.4 The Commission did not receive 

comments on the proposed rule change. 

For the reasons discussed below, the 

Commission is approving the proposed 

rule change. 

II. Description of the Proposed Rule 

Change 

Currently, ICE Clear Europe uses endof-day (‘‘EOD’’) price levels for risk 

management purposes.5 Each business 

day, ICE Clear Europe determines EOD 

prices in accordance with its Price 

Discovery Policy.6 Specifically, ICE 


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