Federal Register / Vol. 88, No. 227 / Tuesday, November 28, 2023 / Notices 83185 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(6). 

5The strategy 6A+3B, 1 time for X price is equal 

to the strategy 2A+B, 3 times for X/3 of the price. 

See also infra note 5. 

6For example, a Complex QOO Order is 

submitted as 6A+3B. The system will reduce the 

strategy to its simplest form by dividing each leg by 

their highest common denominator (i.e., 3), 

resulting in 2A+B (6A/3 + 3B/3). This operation is 

performed so that the system is not replete with 

multiple versions of economically equivalent 

strategies which would populate the Complex 

Order Book and may cause confusion and result in 

unnecessary demands on system resources. 

7For example, if the above Complex Order of 

6A+3B was submitted with a price of 3.30 for the 

strategy, in addition to dividing each leg by 3, the 

system will divide the price by the same value, 

resulting in a price of 1.10 (3.30/3) for the reduced 

strategy of 2A+B. Additionally, the system would 

multiply the quantity of the strategy by 3 so that 

the net result is a strategy for 2A+B for 1.10, 3 

times. In summary, the strategy 6A+3B, 1 time for 

3.30 is economically equivalent to 2A+B, 3 times 

for 1.10. 

8The term ‘‘Complex Order Book’’ means the 

electronic book of Complex Orders maintained by 

the BOX Trading Host. See BOX Rule 7240(a)(8). 

9The Exchange notes that currently when 

reducing strategy orders to their simplest form 

results in a net price with three or fewer decimal 

places, the Complex QOO Order or multi-leg QOO 

Order is executed pursuant to the provisions in 

Rule 7600. 

legacy/companysearch.html. You may 

also call the SEC’s Public Reference 

Room at (202) 551–8090. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

J. Matthew DeLesDernier, 

Deputy Secretary. 

[FR Doc. 2023–26117 Filed 11–27–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99007; File No. SR–BOX– 

2023–28] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Establish IM–7600–8 

November 21, 2023. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on November 

17, 2023, BOX Exchange LLC (‘‘BOX’’ or 

the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Exchange filed the 

proposed rule change pursuant to 

Section 19(b)(3)(A)(iii) of the Act 3 and 

Rule 19b–4(f)(6) thereunder.4 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 proposes to 

establish IM–7600–8. 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 https://

rules.boxexchange.com/rulefilings. 

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 these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization 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 purpose of the proposed rule 

change is to establish IM–7600–8. 

Proposed IM–7600–8 codifies current 

functionality and proposes an 

additional enhancement. Specifically, 

the Exchange is proposing to codify 

current functionality that, upon order 

entry, the system reduces a Complex 

QOO Order or multi-leg QOO Order to 

its simplest form, which also requires a 

corresponding quantity increase and a 

price decrease (for example the system 

will reduce 6A+3B, 1 time to 2A+B, 3 

times for 1⁄3 of the price).5 Additionally, 

the Exchange is proposing that, if 

reducing the order to its simplest form 

results in a net price for the order that 

exceeds three decimal places, the 

system will round the net price of the 

Complex QOO Order or multi-leg QOO 

Order to the third decimal place with 

the advantage to the initiating side. For 

purposes of executing and determining 

the priority of the component legs of 

Complex QOO or multi-leg QOO Orders, 

the system will calculate the quantities 

and prices of the component legs in one 

cent ($0.01) increments necessary to 

achieve the net price of the order. The 

component legs of a Complex QOO 

Order or multi-leg QOO Order will 

execute in one cent ($0.01) increments 

and the priority of each component leg 

will be determined based on its 

execution price. A Complex QOO Order 

or multi-leg QOO Order that is reduced 

to its simplest form will be executed 

pursuant to the provisions in Rule 7600 

(Qualified Open Outcry Orders—Floor 

Crossing), including Rule 7600(c) 

(Submission of QOO Orders). 

Background 

Today, BOX Participants may submit 

a Complex QOO Order or multi-leg 

QOO Order with leg ratios that have not 

been reduced by the highest common 

denominator for the component legs of 

the order. Upon receipt of such a 

Complex QOO Order or multi-leg QOO 

Order, the system will reduce the order 

to its simplest form by dividing the leg 

quantities by their highest common 

denominator.6 The system makes a 

corresponding reduction to the price of 

the strategy and a corresponding 

increase to the quantity of the strategy 

so that the net price of the order before 

and after the reduction by the highest 

common denominator is economically 

equivalent.7 The order is then accepted 

into the system and processed according 

to Exchange rules. The Exchange 

reduces such strategy orders to their 

simplest form to avoid populating the 

Complex Order Book 8 with multiple 

versions of economically equivalent 

strategies which may cause confusion 

and result in unnecessary demands on 

system resources. Currently, when this 

process of reducing an order to its 

simplest form results in a net price with 

more than three decimal places (i.e., 

1.666...) (‘‘non-conforming strategy 

price’’), the system rejects the Complex 

QOO Order or multi-leg QOO Order 

back to the submitting Participant.9

Proposal 

The Exchange now proposes a system 

enhancement to accept a Complex QOO 

Order or multi-leg QOO Order with a 

non-conforming strategy price. Under 

this proposal, when reducing the leg 

ratios of the Complex QOO Order or 

multi-leg QOO Order, the system will 

now round a non-conforming strategy 

price to a net price with three decimals 

to the advantage of the initiating side 

instead of rejecting such orders. The 

order can then be accepted and 

processed pursuant to Exchange rules. 

The Exchange notes that the current 

priority rules for Complex QOO Orders 

and multi-leg QOO Orders will continue 

to apply. As discussed above, if the 


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83186 Federal Register / Vol. 88, No. 227 / Tuesday, November 28, 2023 / Notices 

10See BOX Rule 7600(c). The term ‘‘BOX Book’’ 

means the electronic book of orders on each single 

option series maintained by the BOX Trading Host. 

See BOX Rule 100(a)(10). 

11See BOX Rule 7600(c). The Exchange notes that 

the initiating side of a QOO Order is allocated first 

against any better priced bids or offers on the BOX 

Book, provided that an adequate book sweep size 

was provided by the Floor Broker pursuant to 

paragraph (h). Next, at the same price as the contraside of the QOO Order, if any contracts of the 

initiating side remain, the initiating side of the 

QOO Order will match against Public Customer 

Orders on the BOX Book, along with any bids or 

offers of non-Public Customers ranked ahead of 

such Public Customer Orders on the BOX Book, 

provided that an adequate book sweep size was 

provided by the Floor Broker pursuant to paragraph 

(h). Multiple bids or offers at the same price are 

matched based on time priority. See BOX Rules 

7600(d)(1) and (2). 

12The Exchange notes that BOX currently utilizes 

rounding for the execution of split price 

transactions on the BOX Trading Floor when the 

quantity at each price level is not a natural number. 

Here, the current split pricing algorithm rounds the 

quantity of 2A+B for 4.16 to 62 times and 2A+B for 

4.17 to 91 times because the calculation used to 

split 2A+B for 4.166, 153 times, results in a quantity 

of 61.2 for 4.16 and 91.8 for 4.17. Rounding 61.2 

to 62 and 91.8 to 91, in this case, is to the advantage 

of the initiating side pursuant to BOX IM–7600–7. 

13Today, when a Floor Broker submits a QOO 

Order to the system in sub-minimum increments, 

the system will split the QOO Order into two 

transactions. The transactions are separated by one 

tick that, when combined, will yield a net price 

equal to the original price entered by the Floor 

Broker. See Securities Exchange Act Release No. 

82891 (March 16, 2018), 83 FR 12627 (March 22, 

2018) (Notice of Filing of Amendment No. 1 and 

Order Granting Accelerated Approval of a Proposed 

Rule Change, as Modified by Amendment No. 1, To 

Adopt Rule 7600(i) To Allow Split-Price 

Transactions on the BOX Trading Floor). See also 

Securities Exchange Act Release No. 87613 

(November 25, 2019), 84 FR 66049 (December 2, 

2019) (Notice of Filing of Amendment No. 1 and 

Order Granting Accelerated Approval of a Proposed 

Rule Change, as Modified by Amendment No. 1, To 

Amend Rule 7600). 

14See supra note 10. [sic] 

15The Exchange notes that a Floor Broker may, 

but is not required to, provide a book sweep size. 

The book sweep size is the number of contracts, if 

any, of the initiating side of the QOO Order that the 

Floor Broker is willing to relinquish to orders and 

quotes on the Complex Order Book and the BOX 

Book that have priority pursuant to Rule 7240(b)(2) 

and (3) as well as Rule 7600(c). If the number of 

contracts on the Complex Order Book or the BOX 

Book that have priority over the contra-side order 

is greater than the book sweep size, then the QOO 

Order will be rejected. If the number of contracts 

on the Complex Order Book or BOX Book that have 

priority over the contra-side order is less than or 

equal to the book sweep size, then the QOO Order 

will execute. See BOX Rule 7600(h). 

16See supra note 10. [sic] 

process of reducing a strategy order to 

its simplest form results in the net price 

of the order that exceeds three decimal 

places the system will round the net 

price of the Complex QOO Order or 

multi-leg QOO Order to the third 

decimal place with advantage to the 

initiating side. For purposes of 

executing and determining the priority 

of the component legs of Complex QOO 

or multi-leg QOO Orders, the system 

will calculate the quantities and prices 

of the component legs in one cent 

($0.01) increments necessary to achieve 

the net price of the order. The 

component legs of a Complex QOO 

Order or multi-leg QOO Order will 

execute in one cent ($0.01) increments 

and the priority of each component leg 

will be determined based on its 

execution price. A Complex QOO Order 

or multi-leg QOO Order that is reduced 

to its simplest form will be executed 

pursuant to the provisions in Rule 7600 

(Qualified Open Outcry Orders—Floor 

Crossing), including Rule 7600(c) 

(Submission of QOO Orders). 

The priority rules for Complex QOO 

and multi-leg QOO Orders will apply to 

Complex QOO and multi-leg QOO 

Orders with prices rounded pursuant to 

proposed IM–7600–8. The Exchange 

notes that order priority rules for 

Complex QOO Orders include that 

Complex QOO Orders may not trade 

through any equal or better priced 

Public Customer orders on the Complex 

Order Book and may not trade through 

any non-Public Customer Complex bids 

or offers on the Complex Order Book 

that are ranked ahead of such equal or 

better priced Public Customer Complex 

bids or offers, and may not trade 

through any non-Public Customer bids 

or offers on the Complex Order Book 

that are priced better than the proposed 

execution price. Additionally, the 

Complex QOO Order may be executed 

at a price without giving priority to 

equivalent bids or offers in the 

individual series legs on the initiating 

side, provided at least one options leg 

betters the corresponding bid or offer on 

the BOX Book by at least one minimum 

trading increment as set forth in Rule 

7240(b)(1).10

Order priority rules for multi-leg QOO 

Orders include that each component 

series of a multi-leg QOO Order may not 

trade through any equal or better priced 

Public Customer bids or offers on the 

BOX Book for that series or any nonPublic Customer bids or offers on the 

BOX Book for that series that are ranked 

ahead of or equal to better priced Public 

Customer bids or offers, and may not 

trade through any non-Public Customer 

bids or offers for that series on the BOX 

Book that are priced better than the 

proposed execution price. Specifically, 

the initiating side component legs of a 

multi-leg QOO Order must execute 

against the BOX Book as provided by 

Rules 7600(d) and (h) before executing 

against the contra-side multi-leg QOO 

Order.11

The following examples illustrate 

these concepts: 

Example of the Proposed Rounding and 

Execution of a Complex QOO Order 

With a Non-Conforming Price 

A Complex QOO Order is submitted 

to transact the strategy of 6A+3B for 

12.50, 51 times, where the initiating 

side is buying (quoted in terms of the 

price of buying 6A+3B one time). The 

system will then reduce the order 

6A+3B to its simplest form, dividing by 

its highest common denominator of 3, 

resulting in an order of 2A+B for a net 

price of 4.166... (12.50/3 = 4.166...) and 

a corresponding increase of the quantity 

to 153 (51 * 3). The strategy 2A+B for 

4.166..., 153 times, is the equivalent of 

6A+3B for 12.50, 51 times (6A/3+3B/3 

= 2A+B). Under this proposal, the 

system will round 4.166... in favor of the 

initiating side, resulting in an order of 

2A+B at a net price of 4.166, 153 times. 

Although the net price of the order is 

sub-penny, the component legs must 

execute in one cent ($0.01) increments. 

Accordingly, to execute at a net price of 

4.166, the order will be executed at split 

prices of 2A+B for 4.16, 62 times and 

2A+B for 4.17, 91 times.12 The resulting 

average execution price per strategy is 

4.1659 ((4.16 * 62/153) + (4.17 * 91/153) 

= 4.1659) with the advantage to the 

initiating side of the order.13

Example of Complex QOO Order With 

Resting Public Customer Complex Order 

The above Complex QOO Order 

(6A+3B for 12.50, 51 times, reduced and 

rounded to 2A+B for 4.166, 153 times) 

would execute a quantity of 62 for 4.16 

and a quantity of 91 for 4.17.14

However, assuming there is a Public 

Customer Complex Order offered at 4.16 

on the Complex Order Book, the above 

Complex QOO Order for 2A+B will be 

rejected 15 because the Public Customer 

Complex Order at 4.16 on the Complex 

Order Book has priority over the 

Complex QOO Order. 

Example of Multi-Leg QOO Order With 

Ratio Reduction and No Price Rounding 

A multi-leg QOO Order to buy 

12A+3B for 12.498, 51 times, will first 

be reduced to its simplest form of 4A+B 

(12A/3+3B/3) for 4.166 (12.498/3) and a 

quantity of 153 (51*3) by the system. In 

order to accomplish this execution, the 

system would create an order to buy 

4A+B for 4.16, 62 times, and an order 

to buy 4A+B for 4.17, 91 times.16

Further, assume that the BOX Book for 

leg A is 0.50 bid and 0.52 offered and 

for leg B is 2.00 bid and 2.10 offered. 

The execution for 4.16 would be broken 

down into leg A for 0.52 and leg B for 

2.08 (4*.52+2.08=4.16). If there were a 

Public Customer order on the BOX Book 

at either 0.52 for leg A or 2.08 for leg 


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Federal Register / Vol. 88, No. 227 / Tuesday, November 28, 2023 / Notices 83187 

17The Exchange notes that each component series 

of a multi-leg QOO Order may not trade through 

any equal or better priced Public Customer bids or 

offers on the BOX Book for that series or any nonPublic Customer bids or offers on the BOX Book for 

that series that are ranked ahead of or equal to 

better priced Public Customer bids or offers, and 

may not trade through any non-Public Customer 

bids or offers for that series on the BOX Book that 

are priced better than the proposed execution price. 

See BOX Rule 7600(c). See also supra notes 9 and 

13. 

18See supra note 10. [sic] 

19See supra note 11. [sic] 

20See Nasdaq PHLX LLC (‘‘Phlx’’) Options 8, 

Section 22(a)(2)(E)(i). 

21See Securities Exchange Act Release No. 82315 

(December 13, 2017), 83 FR 12627 (March 22, 2018) 

(Notice of Filing of Amendment No. 1 and Order 

Granting Accelerated Approval of a Proposed Rule 

Change, as Modified by Amendment No. 1, To 

Adopt Rule 7600(i) To Allow Split-Price 

Transactions on the BOX Trading Floor). 

22See BOX Rules 7050(b) and 7240(b)(1). 

23The Exchange notes that the BOX system 

allows the net order price to be entered up to three 

places after the decimal. 

24For example, a Floor Broker can execute a split 

price Complex QOO Order at a price of 2.005 in 

strategy A+B, 100 times (100 contracts of A and 100 

contracts of B). The order would be split into A+B 

for 2.01, 50 times and A+B for 2.00, 50 times for 

a net price of 2.005 for the strategy. The following 

executions would be reported: 50 Leg A at 1.00, 50 

Leg A at 1.00, 50 Leg B at 1.00, and 50 Leg B at 

1.01. 

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

26 5 U.S.C. 78f(b)(5). 

B, the multi-leg QOO Order would be 

rejected because the Public Customer 

Order at either 0.52 for leg A or 2.08 for 

leg B on the BOX Book has priority over 

the leg of the multi-leg QOO Order.17

Example of the Proposed Rounding and 

Execution of a Multi-Leg QOO Order 

With a Non-Conforming Price 

A multi-leg QOO Order is submitted 

to transact the strategy of 12A+3B for 

12.50, 51 times, where the initiating 

side is buying (quoted in terms of the 

price of buying 12A+3B one time). The 

system will then reduce the order 

12A+3B to its simplest form, dividing 

by its highest common denominator of 

3, resulting in an order of 4A+B for a net 

price of 4.166... (12.50/3 = 4.166...) and 

a corresponding increase of the quantity 

to 153 (51*3). The strategy 4A+B for 

4.166..., 153 times, is the equivalent of 

12A+3B for 12.50, 51 times (12A/3+3B/ 

3 = 4A+B). Under this proposal, the 

system will round 4.166... in favor of the 

initiating side, resulting in an order of 

4A+B at a net price of 4.166, 153 times. 

Next, because the net price is subpenny, the order will be executed at 

split prices of 4A+B for 4.16, 62 times 

and 4A+B for 4.17, 91 times.18 The 

resulting average execution price per 

strategy is 4.1659 ((4.16 * 62/153) + 

(4.17 * 91/153) = 4.1659) with the 

advantage to the initiating side of the 

order.19

The Exchange notes that a similar 

concept exists at another exchange 

today.20 Specifically, Phlx Options 8, 

Section 22(a)(2)(E)(i) states that 

‘‘rounding of prices may be used only 

where necessary to execute the trade at 

the MPV, and only to the benefit of a 

Public Customer order or, where 

multiple Public Customer orders are 

involved, for the Public Customer order 

that is earliest in time. If no Public 

Customer order is involved, rounding of 

prices is available to the non-Public 

Customer order that is earliest in time.’’ 

The Exchange notes that its proposal 

differs from Phlx’s rule in that the net 

prices for Complex QOO Orders or 

multi-leg QOO Orders will be rounded 

to the advantage of the initiating side, 

which is in line with how rounding 

happens on BOX today. Specifically, 

BOX currently utilizes rounding for the 

execution of split price transactions on 

the BOX Trading Floor when the 

quantity at each price level is not a 

natural number. In its filing where BOX 

established split price transactions, the 

Exchange provided the following 

example which shows how rounding 

occurs in certain situations where the 

allocation between two increment prices 

results in a fractional amount of 

contracts.21 The example is as follows: 

A Split-Price QOO Order for 301 contracts 

at $1.025 is received by the system where the 

initiating side is to sell. In order to achieve 

a net price of $1.025, 150.5 contracts would 

need to be executed at $1.00 and 150.5 would 

need to be executed at $1.05. However, 

executions must occur in whole natural 

numbers. Therefore, the system will instead 

round to the advantage of the initiating side. 

Specifically, the system will split the order 

into 151 contracts at $1.05 and 150 at $1.00. 

The average execution price is $1.0251 which 

is a better price for the initiating side (i.e., 

selling 301 contracts for an average price of 

$1.0251 instead of $1.025). Two trades would 

be reported to the tape; a purchase of 151 

contracts at $1.05 and a purchase of 150 

contracts at $1.00. 

The Exchange notes that, although 

Complex QOO Order and multi-leg 

QOO Order net prices are allowed to be 

submitted in sub-minimum increment 

prices, the order, including the legs, 

may only be executed in the minimum 

increment, which is one cent ($0.01).22

Net order prices are allowed in subminimum increments 23 because net 

execution prices can be achieved via 

split prices where transactions 

separated by one tick are combined to 

yield a net price equal to or very nearly 

equal to the order price, with any 

advantage going to the initiating side.24

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the 

Act,25 in general, and Section 6(b)(5) of 

the Act,26 in particular, in that it is 

designed to promote just and equitable 

principles of trade, 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. 

The Exchange believes that codifying 

current functionality that, upon order 

entry, the system reduces a Complex 

QOO Order or multi-leg QOO Order to 

its simplest form removes impediments 

to and perfects the mechanism of a free 

and open market and a national market 

system, and, in general protects 

investors and the public interest by 

providing clarity and transparency in 

the handling of certain strategy orders. 

Additionally, if the process of reducing 

a strategy order to its simplest form 

results in the net price of the order that 

exceeds three decimal places the 

Exchange proposes to round the net 

price of the Complex QOO Order or 

multi-leg QOO Order to the third 

decimal place with advantage to the 

initiating side. For purposes of 

executing and determining the priority 

of the component legs of Complex QOO 

or multi-leg QOO Orders, the system 

will calculate the quantities and prices 

in one cent ($0.01) increments of the 

component legs necessary to achieve the 

net price of the order. The component 

legs of a Complex QOO Order or multileg QOO Order will execute in one cent 

($0.01) increments and the priority of 

each component leg will be determined 

based on its execution price. A Complex 

QOO Order or multi-leg QOO Order that 

is reduced to its simplest form will be 

executed pursuant to the provisions in 

Rule 7600 (Qualified Open Outcry 

Orders—Floor Crossing), including Rule 

7600(c) (Submission of QOO Orders). 

The Exchange believes that allowing 

investors to enter Complex QOO Orders 

and multi-leg QOO Orders without first 

reducing such orders to their simplest 

form allows investors the flexibility to 

express and enter orders according to 

their preferences. In order to better 

accommodate these investor 

preferences, the Exchange reduces such 

strategy orders to their simplest form so 

that the system is not replete with 

multiple versions of economically 

equivalent strategies which would 

populate the Complex Order Book and 

may cause confusion and result in 

unnecessary demands on system 

resources. Thus, the Exchange believes 

that accepting and handling such 

strategy orders as proposed removes 


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83188 Federal Register / Vol. 88, No. 227 / Tuesday, November 28, 2023 / Notices 

27See supra note 11. 

28See BOX Rule 7600(c). 

29See BOX Rule 7600(c). The Exchange notes that 

the initiating side of a QOO Order is allocated first 

against any better priced bids or offers on the BOX 

Book, provided that an adequate book sweep size 

was provided by the Floor Broker pursuant to 

paragraph (h). Next, at the same price as the contraside of the QOO Order, if any contracts of the 

initiating side remain, the initiating side of the 

QOO Order will match against Public Customer 

Orders on the BOX Book, along with any bids or 

offers of non-Public Customers ranked ahead of 

such Public Customer Orders on the BOX Book, 

provided that an adequate book sweep size was 

provided by the Floor Broker pursuant to paragraph 

(h). Multiple bids or offers at the same price are 

matched based on time priority. See BOX Rules 

7600(d)(1) and (2). Further rule 7600(h) provides 

that a Floor Broker may, but is not required to, 

provide a book sweep size for Complex QOO Orders 

and multi-leg QOO orders. 

30See BOX Rule 7600(i) and IM–7600–7. See also 

supra note 11. 

31See supra note 18. 

32 15 U.S.C. 78s(b)(3)(A). 

33 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6)(iii) requires a self-regulatory organization to 

give the Commission written notice of its intent to 

file the proposed rule change, along with a brief 

description and text of the proposed rule change, 

at least five business days prior to the date of filing 

of the proposed rule change, or such shorter time 

as designated by the Commission. The Exchange 

has satisfied this requirement. 

34 17 CFR 240.19b–4(f)(6)(iii). 

impediments to and perfects the 

mechanism of a free and open market 

and a national market system, and, in 

general protects investors and the public 

interest. 

The Exchange believes that the 

proposed rule is consistent with current 

rules on BOX. Specifically, as detailed 

above, BOX rounds to the advantage of 

the initiating side for split-price 

transactions.27 The Exchange believes 

that rounding to the advantage of the 

initiating side in certain situations 

results in the fair and equitable pricing 

of orders among BOX Participants, and 

provides clarity and transparency in the 

Exchange’s rules so that all BOX 

Participants will be informed as to the 

net price the Participant is entitled to 

receive as a result of rounding. The 

Exchange believes that rounding to the 

advantage of the initiating side is 

reasonable and appropriate, as the 

initiating side is providing liquidity to 

the Exchange and thus adding value to 

the market. 

The Exchange notes that order 

priority rules for Complex QOO Orders 

include that Complex QOO Orders may 

not trade through any equal or better 

priced Public Customer orders on the 

Complex Order Book and may not trade 

through any non-Public Customer 

Complex bids or offers on the Complex 

Order Book that are ranked ahead of 

such equal or better priced Public 

Customer Complex bids or offers, and 

may not trade through any non-Public 

Customer bids or offers on the Complex 

Order Book that are priced better than 

the proposed execution price. 

Additionally, the Complex QOO Order 

may be executed at a price without 

giving priority to equivalent bids or 

offers in the individual series legs on 

the initiating side, provided at least one 

options leg betters the corresponding 

bid or offer on the BOX Book by at least 

one minimum trading increment as set 

forth in Rule 7240(b)(1).28 Order priority 

rules for multi-leg QOO Orders include 

that each component series of a multileg QOO Order may not trade through 

any equal or better priced Public 

Customer bids or offers on the BOX 

Book for that series or any non-Public 

Customer bids or offers on the BOX 

Book for that series that are ranked 

ahead of or equal to better priced Public 

Customer bids or offers, and may not 

trade through any non-Public Customer 

bids or offers for that series on the BOX 

Book that are priced better than the 

proposed execution price. Specifically, 

the initiating side component legs of a 

multi-leg QOO Order must execute 

against the Complex Order Book and the 

BOX Book as provided by Rules 7600(d) 

and (h) before executing against the 

contra-side multi-leg QOO Order.29

These priority rules will continue to be 

applicable, which the Exchange believes 

removes impediments to and perfects 

the mechanism of a free and open 

market and a national market system, 

and, in general protects investors and 

the public interest. 

Lastly, the Exchange notes that the 

proposed change will result in orders 

being accepted on BOX that BOX’s 

system currently rejects which, in turn, 

could result in increased liquidity on 

BOX to the benefit of all Participants. As 

such, BOX believes the proposed rule 

change is in the public interest, and 

therefore, consistent with the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. As discussed 

above, the proposed change is 

consistent with the rules on BOX 30 and 

will allow BOX to accept orders that it 

currently rejects, which may result in 

increased liquidity to the benefit of all 

Participants. The Exchange also believes 

that the proposed change will not 

impose any burden on intramarket 

competition as the proposed change 

applies equally to all Floor Participants 

who wish to execute Complex QOO 

Orders or multi-leg QOO Orders on the 

BOX Trading Floor. Further, the 

Exchange believes that the proposed 

change will not impose any burden on 

intermarket competition as a similar 

concept currently exists on another 

exchange and other exchanges could 

choose to adopt similar rules.31

As such, the Exchange does not 

believe that the proposed rule change 

will impose any burden on competition 

not necessary or appropriate in 

furtherance of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not (a) significantly affect 

the protection of investors or the public 

interest; (b) impose any significant 

burden on competition; and (c) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate, it has 

become effective pursuant to Section 

19(b)(3)(A) of the Act 32 and Rule 19b– 

4(f)(6) thereunder.33

A proposed rule change filed under 

Rule 19b–4(f)(6) normally does not 

become operative prior to 30 days after 

the date of the filing. However, pursuant 

to Rule 19b–4(f)(6)(iii),34 the 

Commission may designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has asked the 

Commission to waive the 30-day 

operative delay. The Exchange states 

that waiver of the delay will allow the 

Exchange to immediately begin 

accepting orders that the Exchange’s 

system currently rejects, which will 

provide investors with the flexibility to 

express and enter orders according to 

their preferences. Additionally, the 

Exchange states that accepting and 

executing orders that would otherwise 

be rejected may increase liquidity on the 

Exchange, which would benefit all 

Exchange Participants. The Exchange 

notes that although orders may be 

submitted in sub-minimum increments, 

priority is determined and orders are 

executed in minimum increments of 

$0.01, and the proposal does not change 

order priority and execution as 

governed by Exchange Rule 7600, 

including Exchange Rule 7600(c). 

The Commission finds that waiving 

the 30-day operative delay is consistent 


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Federal Register / Vol. 88, No. 227 / Tuesday, November 28, 2023 / Notices 83189 

35See proposed BOX IM–7600–8. 

36See id. 

37See supra note 21 and accompanying text. 

38For purposes only of accelerating the operative 

date of this proposal, the Commission has 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. 15 

U.S.C. 78c(f). 

39 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Exchange initially filed the proposed 

pricing changes on November 14, 2023 (SR–BX– 

2023–029). On November 16, 2023, the Exchange 

withdrew that filing and submitted this filing. 

with the protection of investors and the 

public interest. As described above, 

BOX’s system reduces complex QOO 

and multi-leg QOO orders submitted to 

the Exchange to their simplest form to 

avoid populating the Exchange’s 

Complex Order Book with multiple 

versions of economically equivalent 

strategies. When this process results in 

a net price for a Complex QOO Order or 

multi-leg QOO Order that exceeds three 

decimal places, the Exchange’s system 

currently rejects the Complex QOO 

Order or multi-leg QOO Order back to 

the submitting Participant. Under the 

proposal, the Exchange will round the 

net price of such an order to the third 

decimal place with the advantage to the 

initiating side. This process will allow 

the Exchange to accept Complex QOO 

and multi-leg QOO Orders that the 

Exchange’s system currently rejects, 

which will provide investors with an 

additional venue for trading these 

orders. The system will calculate the 

quantities and prices, in $0.01 

increments, of the component legs 

necessary to achieve the net price of a 

Complex QOO Order or multi-leg QOO 

Order, and the component legs of the 

orders will execute in $0.01 increments, 

with their priority based on their 

execution prices.35 A Complex QOO 

Order or multi-leg QOO Order that has 

been reduced to its simplest form will 

be executed pursuant to Exchange Rule 

7600, including Exchange Rule 

7600(c).36 As described above, the 

process for calculating the quantities 

and execution prices of the component 

legs of a Complex QOO Order or multileg QOO Order is consistent with the 

process that the Exchange currently uses 

for executing split price transactions on 

the Exchange’s trading floor.37 For these 

reasons, the Commission designates the 

proposal operative upon filing.38

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

BOX–2023–28. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–BOX–2023–22. 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 

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. Do not include personal 

identifiable information in submissions; 

you should submit only information 

that you wish to make available 

publicly. We may redact in part or 

withhold entirely from publication 

submitted material that is obscene or 

subject to copyright protection. All 

submissions should refer to file number 

SR–BOX–2023–28 and should be 

submitted on or before December 19, 

2023. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.39

Christina Z. Milnor, 

Assistant Secretary. 

[FR Doc. 2023–26111 Filed 11–27–23; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–99008; File No. SR–BX– 

2023–031] 

Self-Regulatory Organizations; Nasdaq 

BX, Inc.; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change To Amend BX Options 7, 

Section 2 Regarding Fees and Rebates 

November 21, 2023. 

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 

17, 2023, Nasdaq BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘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 its 

Pricing Schedule at Options 7, Section 

2.3

The text of the proposed rule change 

is available on the Exchange’s website at 

https://listingcenter.nasdaq.com/ 

rulebook/bx/rules, 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 

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 


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