Federal Register / Vol. 89, No. 220 / Thursday, November 14, 2024 / Notices 90201 

25 15 U.S.C. 78s(b)(3)(A). 

26 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. 

27 17 CFR 240.19b–4(f)(6)(iii). 

28For purposes only of waiving the 30-day 

operative delay, the Commission has also 

considered the proposed rule’s impact on 

efficiency, competition, and capital formation. See 

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

29 17 CFR 200.30–3(a)(12), (59). 

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

2 17 CFR 240.19b–4. 

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

4 17 CFR 240.19b–4(f)(2). 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) 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 25 and Rule 19b– 

4(f)(6) thereunder.26

A proposed rule change filed 

pursuant to Rule 19b–4(f)(6) under the 

Act normally does not become operative 

for 30 days after the date of its filing. 

However, Rule 19b–4(f)(6)(iii) 27 permits 

the Commission to designate a shorter 

time if such action is consistent with the 

protection of investors and the public 

interest. The Exchange has requested 

that the Commission waive the 30-day 

operative delay so that the proposal may 

become operative immediately upon 

filing. According to the Exchange, 

waiver of the operative delay will 

ensure fair competition among the 

exchanges by allowing the Exchange to 

implement its proposal without delay, 

thus creating competition among Short 

Term Option Series throughout the 

industry, which will ultimately benefit 

investors. The proposed rule change 

raises no novel legal or regulatory 

issues. Thus, the Commission believes 

that waiver of the 30-day operative 

delay is consistent with the protection 

of investors and the public interest. 

Accordingly, the Commission hereby 

waives the 30-day operative delay and 

designates the proposed rule change 

operative upon filing.28

At any time within 60 days of the 

filing of such 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 (https://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

NYSEAMER–2024–65 on the subject 

line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–NYSEAMER–2024–65. 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 (https://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–NYSEAMER–2024–65 and should 

be submitted on or before December 5, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.29

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–26415 Filed 11–13–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101536; File No. SR–BOX– 

2024–26] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fee 

Schedule Relating to BOX Connectivity 

Fees and Port Fees for Trading on the 

BOX Options Market LLC Facility 

November 7, 2024. 

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 October 

24, 2024, BOX Exchange LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III, below, which Items have been 

prepared by the Exchange. The 

Exchange filed the proposed rule change 

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

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

which renders the proposal effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the Fee Schedule relating to 

BOX Connectivity Fees and Port Fees on 

the BOX Options Market LLC (‘‘BOX’’) 

options facility. 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. 


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5The Exchange initially filed the proposed 

pricing change on June 3, 2024 (SR–BOX–2024–13). 

On June 18, 2024, the Exchange withdrew that 

filing and submitted SR–BOX–2024–16. On August 

16, 2024, the Exchange withdrew SR–BOX–2024–16 

and submitted SR–BOX–2024–19. On October 10, 

2024, the Exchange withdrew SR–BOX–2024–19 

and submitted SR–BOX–2024–24. The instant filing 

replaces SR–BOX–2024–24, which was withdrawn 

on October 24, 2024. 

6 If the Exchange intends to increase or decrease 

fees for Connectivity and Ports in the future, the 

Exchange would be required to file a proposed rule 

change with the Commission under Section 19(b) of 

the Act to amend its Fee Schedule. 

7The 10 Gb and Non-10 Gb Connection fees were 

initially effective on July 19, 2018. See Securities 

Exchange Act Release No. 83728 (July 27, 2018), 83 

FR 37853 (August 2, 2018) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

To Amend the Fee Schedule on BOX Market LLC 

(‘‘BOX’’) Options Facility To Establish BOX 

Connectivity Fees for Participants and NonParticipants Who Connect to the BOX Network). 

These fees were suspended on September 17, 2018 

and became effective again on October 31, 2019. 

HSVF port fees were increased on January 31, 2018. 

See Securities Exchange Act Release No. 82654 

(February 7, 2018), 83 FR 6284 (February 13, 2018) 

(SR–BOX–2018–04) (Notice of Filing and 

Immediate Effectiveness of a Proposed Rule Change 

To Amend Section VI. (Technology Fees) of the 

BOX Fee Schedule). SAIL, FIX, and Drop Copy port 

fees were established on April 27, 2018. See 

Securities Exchange Act Release No. 83197 (May 9, 

2018), 83 FR 22567 (May 15, 2018) (SR–BOX–2018– 

15) (Notice of Filing and Immediate Effectiveness of 

a Proposed Rule Change To Amend the Fee 

Schedule on the BOX Market LLC (‘‘BOX’’) Options 

Facility To Amend Connectivity Fees and Establish 

Port Fees). 

8See https://fred.stlouisfed.org/series/ 

PCU51825182. 

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 Connectivity 

Fees for 10 gigabit (‘‘Gb’’) Connections, 

Non-10 Gb Connections, Financial 

Information Exchange (‘‘FIX’’) Ports, 

SOLA® Access Information Language 

(‘‘SAIL’’) Ports, Drop Copy Ports, and 

High Speed Vendor Feed (‘‘HSVF’’) 

Ports (collectively ‘‘Connectivity and 

Ports’’).5 Specifically, the Exchange 

proposes a one-time 6 increase to its fees 

for Connectivity and Ports in Sections 

III.A.2 and III.B of the Fee Schedule. 

By way of background, a physical 

connection is utilized by a Participant 

or non-Participant to connect to BOX at 

the datacenters where BOX’s servers are 

located. BOX currently assesses the 

following physical connectivity fees for 

Participants and non-Participants on a 

monthly basis: $1,000 per connection 

for a Non-10 Gb Connection and $5,000 

per connection for a 10 Gb Connection. 

The Exchange proposes to increase, on 

a one-time basis, the monthly fee for 

Non-10 Gb Connections from $1,000 to 

$1,080 per connection and from $5,000 

to $5,400 monthly fee for each 10 Gb 

Connection. The Exchange notes the 

proposed fee changes better enable BOX 

to continue to maintain and improve its 

market technology and services. 

Further, BOX currently provides four 

types of ports, including: (i) the FIX 

Port, which allows Participants to 

electronically send orders in all 

products traded on BOX; (ii) the SAIL 

Port, which allows Market Makers to 

submit electronic quotes and orders and 

other Participants to submit orders to 

BOX; (iii) the Drop Copy Port, which 

provides a real-time feed containing 

trade execution, trade correction, trade 

cancellation and trade allocation for 

regular and complex orders on BOX for 

Participants; and (iv) the HSVF Port, 

which provides a BOX market data feed 

for both Participants and nonParticipants. The Exchange notes that 

Participants must connect to a 

minimum of one port via FIX or SAIL 

and that there is no minimum or 

maximum number of ports required for 

the Drop Copy Port or the HSVF Port. 

Current FIX Port fees are as follows: 

FIX ports BOX monthly port fees 

1st FIX Port .................... $500 per port per month. 

FIX Ports 2 through 5 ..... $250 per port per month. 

Additional FIX Ports over 

5.

$150 per port per month. 

Current SAIL Port fees are as follows: 

SAIL ports BOX monthly port fees 

Market Making ................ $1,000 per month for all 

Ports. 

Order Entry ..................... $500 per month per port 

(1–5 Ports). 

$150 per month for each 

additional Port. 

The Exchange proposes to increase 

FIX Port fees on a one-time basis as 

follows: 

FIX ports BOX monthly port fees 

1st FIX Port .................... $540 per port per month. 

FIX Ports 2 through 5 ..... $270 per port per month. 

Additional FIX Ports over 

5.

$162 per port per month. 

The Exchange proposes to increase 

SAIL Port fees on a one-time basis as 

follows: 

SAIL ports BOX monthly port fees 

Market Making ................ $1,080 per month for all 

Ports. 

Order Entry ..................... $540 per month per port 

(1–5 Ports). 

$162 per month for each 

additional Port. 

The Exchange also proposes to 

increase Drop Copy Ports on a one-time 

basis, currently $500 per port per 

month, to $540 per port per month for 

each month a Participant is credentialed 

to use a Drop Copy Port. Drop Copy Port 

fees will remain capped at $2,000 per 

month. 

The Exchange proposes lastly to 

increase HSVF Port fees on a one-time 

basis, currently $1,500 per month, to 

$1,620 per month for each month a 

Participant or non-Participant is 

credentialed to use the HSVF Port. 

The Exchange notes that BOX 

continuously invests in improvements 

that enhance the value of its 

Connectivity and Ports services. BOX 

has expended, and will continue to 

expend, resources to innovate and 

modernize technology so that it may 

benefit its Participants and continue to 

compete among other options markets. 

BOX regularly invests in efforts to 

support and optimize its systems to 

support system capacity, reliability, and 

performance. Yet the Exchange has not 

adjusted any of the fees included in this 

proposal since 2018, to even partially 

offset the costs of maintaining and 

enhancing its Connectivity and Ports 

services.7

As discussed below, the Exchange 

proposes to adjust Connectivity and 

Ports fees by an industry- and productspecific inflationary measure. It is 

reasonable and consistent with the 

Securities and Exchange Act of 1934 

(the ‘‘Act’’) for BOX to recoup its 

investments, at least in part, by 

adjusting its fees. Continuing to operate 

at fees frozen at 2018 levels impacts 

BOX’s ability to enhance its services 

and the interests of market participants. 

The proposed fee increases are based on 

an industry-specific Producer Price 

Index (PPI), which is a tailored measure 

of inflation.8 As a general matter, the 

Producer Price Index is a family of 

indexes that measures the average 

change over time in selling prices 

received by domestic producers of 

goods and services. PPI measures price 


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9See https://www.bls.gov/ppi/overview.htm. 

10 Id. 

11NAICS appears in the PPI Detailed Report and 

is available at https://data.bls.gov/dataViewer/view/ 

timeseries/PCU5182--5182--. 

12See https://www.bls.gov/ppi/factsheets/ 

producer-price-index-for-the-data-processing-andrelated-services-industry-naics-518210.htm. 

13The Exchange used July 2018 as a starting point 

for measuring Data PPI because that is when the last 

of the Connectivity and Ports fees were established. 

See supra note 7. 

14See https://www.usinflationcalculator.com/ 

inflation/consumer-price-index-and-annualpercent-changes-from-1913-to-2008/. 

15See infra discussion of system performance 

advancements. Additionally, other exchanges have 

filed for increases in certain fees, based in part on 

comparisons to inflation. See, e.g., Securities 

Exchange Act Release Nos. 101017 (September 12, 

2024), 89 FR 76545 (September 18, 2024) (SR– 

CboeBYX–2024–032); 100513 (July 12, 2024), 89 FR 

58460 (July 18, 2024) (SR–Phlx–2024–27). 

16 15 U.S.C. 78f(b). 

17 15 U.S.C. 78f(b)(5). 

18 Id. 

19 15 U.S.C. 78f(b)(4). 

change from the perspective of the 

seller. This contrasts with other metrics, 

such as the Consumer Price Index (CPI), 

that measure price change from the 

purchaser’s perspective.9 About 10,000 

PPIs for individual products and groups 

of products are tracked and released 

each month.10 PPIs are available for the 

output of nearly all industries in the 

goods-producing sectors of the U.S. 

economy—mining, manufacturing, 

agriculture, fishing, and forestry—as 

well as natural gas, electricity, and 

construction, among others. The PPI 

program covers approximately 69 

percent of the service sector’s output, as 

measured by revenue reported in the 

2017 Economic Census. For purposes of 

this proposal, the relevant industryspecific PPI is the Data Processing and 

Related Services PPI (‘‘Data PPI’’), 

which is an industry net-output PPI that 

measures the average change in selling 

prices received by companies that 

provide data processing services. The 

Data PPI was introduced in January 

2002 by the Bureau of Labor Statistics 

(BLS) as part of an ongoing effort to 

expand Producer Price Index coverage 

of the services sector of the U.S. 

economy and is identified as NAICS– 

518210 in the North American Industry 

Classification System.11 According to 

the BLS ‘‘[t]he primary output of NAICS 

518210 is the provision of electronic 

data processing services. In the broadest 

sense, computer services companies 

help their customers efficiently use 

technology. The processing services 

market consists of vendors who use 

their own computer systems—often 

utilizing proprietary software—to 

process customers’ transactions and 

data. Companies that offer processing 

services collect, organize, and store a 

customer’s transactions and other data 

for record-keeping purposes. Price 

movements for the NAICS 518210 index 

are based on changes in the revenue 

received by companies that provide data 

processing services. Each month, 

companies provide net transaction 

prices for a specified service. The 

transaction is an actual contract selected 

by probability, where the pricedetermining characteristics are held 

constant while the service is repriced. 

The prices used in index calculation are 

the actual prices billed for the selected 

service contract.’’ 12 The Exchange 

believes the Data PPI is an appropriate 

measure to be considered in the context 

of the proposed rule change to increase 

the fees for BOX Connectivity and Ports 

because BOX uses its ‘‘own computer 

systems’’ and ‘‘proprietary software,’’ 

i.e., its own servers and proprietary 

matching engine software, respectively, 

to collect, organize, store and report 

customers’ transactions on BOX’s 

proprietary trading platform. In other 

words, BOX is in the business of data 

processing and related services. 

For the period from July 2018 to 

August 2024, the Data PPI had a starting 

value of 107 in July 2018 and an ending 

value of 116.022 in August 2024, an 

8.43% increase.13 This indicates that 

companies who are also in the data 

storage and processing business have 

generally increased prices for a 

specified service covered under NAICS 

518210 by an average of 8.43% during 

this period. Based on that percentage 

change, the Exchange proposes to make 

a one-time fee increase of 8% for BOX 

Connectivity and Ports, which reflects 

an increase covering approximately the 

period since the last adjustment was 

made. The Exchange further believes the 

Data PPI is an appropriate measure for 

purposes of the proposed change on the 

basis that it is a stable metric with 

limited volatility, unlike other 

consumer-side inflation metrics. In fact, 

the Data PPI has not experienced a 

greater than 2.16% increase for any one 

calendar year period since Data PPI was 

introduced into the PPI in January 2002. 

The average calendar year change from 

January 2002 to December 2023 was 

.62%, with a cumulative increase of 

15.67% over this 21-year period. The 

Exchange believes the Data PPI is 

considerably less volatile than other 

inflation metrics such as CPI, which has 

had individual calendar-year increases 

of more than 6.5%, and a cumulative 

increase of over 73% over the same 

period.14 The Exchange believes the 

Data PPI, and significant investments 

into and enhanced performance of BOX, 

support the reasonableness of the 

proposed fee increases.15

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with the ‘‘Act 

and the rules and regulations 

thereunder applicable to the Exchange 

and, in particular, the requirements of 

Section 6(b) of the Act.16 Specifically, 

the Exchange believes the proposed rule 

change is consistent with the Section 

6(b)(5) 17 requirements that the rules of 

an exchange be designed to prevent 

fraudulent and manipulative acts and 

practices, to promote just and equitable 

principles of trade, to foster cooperation 

and coordination with persons engaged 

in regulating, clearing, settling, 

processing information with respect to, 

and facilitating transactions in 

securities, to remove impediments to 

and perfect the mechanism of a free and 

open market and a national market 

system, and, in general, to protect 

investors and the public interest. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Section 6(b)(5) 18 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

The Exchange also believes the 

proposed rule change is consistent with 

Section 6(b)(4) 19 of the Act, which 

requires that Exchange rules provide for 

the equitable allocation of reasonable 

dues, fees, and other charges among its 

Participants and other persons using its 

facilities. 

This belief is based on two factors. 

First, the current fees do not properly 

reflect the quality of the services and 

products, as the fees for the services and 

products in question have been static in 

nominal terms, and therefore falling in 

real terms due to inflation. Second, the 

Exchange believes that investments 

made in enhancing the capacity and 

speed of BOX systems increase the 

performance of the services and 

products. 

As noted above, the Exchange has not 

increased any of the fees included in the 

proposal since 2018. However, in the 

years following the last fee increase 

BOX has made significant investments 

in upgrades to BOX systems, enhancing 

the quality of its services, as measured 

by, among other things, increased 

throughput and faster processing 

speeds. In other words, BOX customers 

have greatly benefitted, while the BOX’s 

ability to recoup its investments has 

been hampered. Between 2018 and 

2024, the inflation rate is 3.86% per 

year, on average, producing a 


ddrumheller on DSK120RN23PROD with NOTICES1
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20See https://www.officialdata.org/us/inflation/ 

2018?amount=1. 

21The general CPI inflation rate was measured 

from the beginning of 2018 through October 24, 

2024, while the Data PPI was measured from July 

2018 through August 2024. 

22The Exchange notes that only Participants may 

purchase FIX Ports, SAIL Ports, and Drop Copy 

Ports. 

23 15 U.S.C. 78s(b)(3)(A)(ii). 

24 17 CFR 240.19b–4(f)(2). 

cumulative inflation rate of 25.50%.20

Using the more targeted inflation 

number of Data PPI, the cumulative 

inflation rate was 8.43% during an 

approximately similar time period.21

The Exchange believes the Data PPI is 

a reasonable metric to base this fee 

increase on because it is targeted to 

producer-side increases in the data 

processing industry, which based on the 

definition adopted by BLS would 

include BOX’s Connectivity and Ports 

services. Notwithstanding inflation, as 

noted above, the Exchange has not 

increased its fees at all for over six years 

for the subject services. The proposed 

fee changes represent a modest increase 

from the current fees. 

The Exchange believes the proposed 

fee increase is reasonable in light of 

BOX’s continued expenditure in 

maintaining a robust technology 

ecosystem. Furthermore, BOX continues 

to invest in maintaining and enhancing 

its Connectivity and Ports services—for 

the benefit and often at the behest of its 

Participants. Specifically, BOX has 

recently replaced trading servers and 

added additional servers to increase 

performance and capacity, to increase 

competitiveness, and to support growth. 

For example, the rapid growth of trading 

volumes from 2020 has increased the 

number of servers, network devices, and 

telecommunications lines required to 

keep pace with the growth of trade, 

order, and quote data. As part of another 

recent change, BOX deployed additional 

low latency network switches and 

increased its datacenter space. As a 

result of these initiatives, BOX 

increased its overall hardware footprint 

at the datacenters which directly results 

in increased support costs at the 

datacenter as well. 

The goal of the initiatives discussed 

above, among other things, is to provide 

faster and more consistent order 

handling and matching performance for 

options, while ensuring quicker 

processing time and supporting 

increasing volumes. Accordingly, BOX 

continuously invests in improvements 

that enhance the value of its 

Connectivity and Ports services. As 

discussed above, BOX expended, and 

will continue to expend, resources to 

innovate and modernize technology so 

that it may benefit its Participants and 

continue to compete among other 

options markets. BOX regularly invests 

in efforts to support and optimize its 

systems to support system capacity, 

reliability, and performance. 

Further, the Exchange notes that 

Participants and non-Participants will 

continue to choose the method of 

connectivity based on their specific 

needs and no broker-dealer is required 

to become a Participant of, let alone 

connect directly to, BOX. Moreover, 

direct connectivity is not a requirement 

to participate on BOX. Participants may 

choose to connect indirectly to BOX via 

a third-party reseller of connectivity. 

This indirect connectivity is a viable 

alternative for market participants to 

consume market data from BOX without 

connecting directly to BOX (and thus 

not pay BOX’s connectivity fees), which 

alternative is already being used by both 

Participants and non-Participants. 

The Exchange believes that the 

proposed fee changes are equitably 

allocated and not unfairly 

discriminatory because the fee increase 

would be applied uniformly across all 

market participants that voluntarily 

subscribe to or purchase connectivity or 

ports. The Exchange also believes that 

the proposal represents an equitable 

allocation of reasonable dues, fees and 

other charges because Exchange fees 

have fallen in real terms during the 

relevant period. Finally, the Exchange 

believes that the proposed fee changes 

are not unfairly discriminatory because 

the fees would be assessed uniformly 

across all market participants, that 

voluntarily purchase connectivity or 

ports, in the same manner they are 

today. The Exchange also notes that its 

Connectivity and Ports services remain 

available for purchase by all market 

participants. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

proposed fee changes will not impact 

intramarket competition because it will 

apply to all similarly situated 

Participants and non-Participants 

equally (i.e., all market participants that 

choose to purchase connectivity or 

ports).22 As such, the Exchange believes 

that the proposed fees do not put any 

market participants at a relative 

disadvantage compared to other market 

participants. As noted above, the fee 

schedule would continue to apply to all 

market participants that choose to 

connect to BOX in the same manner as 

it does today albeit at inflation-adjusted 

rates for certain fees, and market 

participants may choose whether to 

connect directly to BOX at all. The 

Exchange also believes that the level of 

the proposed fees neither favor nor 

penalize one or more categories of 

market participants in a manner that 

would impose an undue burden on 

competition. 

The Exchange believes that the 

proposed fees do not impose a burden 

on intermarket competition that is not 

necessary or appropriate. In determining 

the proposed fees, the Exchange utilized 

an objective and stable metric with 

limited volatility. Utilizing Data PPI 

over a specified period of time is a 

reasonable means of recouping BOX’s 

investment in maintaining and 

enhancing its Connectivity and Ports 

services. The Exchange believes 

utilizing Data PPI, a tailored measure of 

inflation, to increase certain fees for 

BOX connectivity to recoup BOX’s 

investment in maintaining and 

enhancing its Connectivity and Ports 

services would not impose a burden on 

intermarket competition. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action Effectiveness 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Exchange Act 23

and Rule 19b–4(f)(2) thereunder,24

because it establishes or changes a due, 

or fee. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend the rule change if 

it appears to the Commission that the 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or would otherwise further 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 


ddrumheller on DSK120RN23PROD with NOTICES1
Federal Register / Vol. 89, No. 220 / Thursday, November 14, 2024 / Notices 90205 

25 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

3The Commission approved proposals by several 

exchanges to list and trade shares of trusts that hold 

Ether, including the Trust. See Securities Exchange 

Act Release No. 100224 (May 23, 2024), 89 FR 

46937 (May 30, 2024). 

4See Securities Exchange Act Release No. 100661 

(Aug. 6, 2024), 89 FR 65690 (‘‘Notice’’). 

5 15 U.S.C. 78s(b)(2). 

6See Securities Exchange Act Release No. 

1001154 (Sept. 24, 2024) 89 FR 79664 (designating 

November 10, 2024, as the date by which the 

Commission shall either approve, disapprove, or 

institute proceedings to determine whether to 

disapprove the proposed rule change). 

7 15 U.S.C. 78s(b)(2)(B). 

8See supra note 4. 

9See Notice, 89 FR at 65691. The Exchange states 

that the Trust is not an investment company 

registered under the Investment Company Act of 

1940, as amended. See id. 

10See id. 

11See id. 

12See id. 

13See id. 

14See id. at 65691–2 and ISE Options 4, Section 

3(h)(iv). 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

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

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include file number SR– 

BOX–2024–26 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to file 

number SR–BOX–2024–26. 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 (https://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–2024–26 and should be 

submitted on or before December 5, 

2024. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.25

Sherry R. Haywood, 

Assistant Secretary. 

[FR Doc. 2024–26407 Filed 11–13–24; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–101571; File No. SR–ISE– 

2024–35] 

Self-Regulatory Organizations; Nasdaq 

ISE, LLC; Order Instituting 

Proceedings To Determine Whether To 

Approve or Disapprove a Proposed 

Rule Change To List and Trade 

Options on the iShares Ethereum Trust 

November 8, 2024. 

I. Introduction 

On July 22, 2024, Nasdaq ISE, LLC 

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

Securities and Exchange Commission 

(‘‘Commission’’), pursuant to Section 

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

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

Rule 19b–4 thereunder,2 a proposed rule 

change to allow the listing and trading 

of options on iShares Ethereum Trust 

(‘‘Trust’’).3 The proposed rule change 

was published for comment in the 

Federal Register on August 12, 2024.4

The Commission has received no 

comments regarding the proposal. 

On September 30, 2024, pursuant to 

Section 19(b)(2) of the Exchange Act,5

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.6

This order institutes proceedings under 

Section 19(b)(2)(B) of the Act 7 to 

determine whether to approve or 

disapprove the proposed rule change. 

II. Description of the Proposed Rule 

Change 

As described more fully in the 

Notice,8 the Exchange proposes to 

amend Options 4, Section 3(h)(iv), to 

add the Trust to the list of ExchangeTraded Fund Shares (‘‘Exchange-Traded 

Funds Shares’’ or ‘‘ETFs’’) that are 

appropriate for options trading.9 The 

Exchange states that the investment 

objective of the Trust is to reflect 

generally the performance of the price of 

ether before payment of the Trust’s 

expenses and liabilities. The Exchange 

states that shares of the Trust are 

intended to constitute a simple means of 

making an investment similar to an 

investment in ether through the public 

securities market rather than by 

acquiring, holding, and trading ether 

directly on a peer-to-peer or other basis 

or via a digital asset platform.10 The 

Exchange further states that shares of 

the Trust have been designed to remove 

the obstacles represented by the 

complexities and operational burdens 

involved in a direct investment in ether, 

while at the same time having an 

intrinsic value that reflects, at any given 

time, the investment exposure to the 

ether owned by the Trust at such time, 

less the Trust’s expenses and 

liabilities.11 The Exchange states that 

although shares in the Trust are not the 

exact equivalent of a direct investment 

in ether, they provide investors with an 

alternative method of achieving 

investment exposure to ether through 

the public securities market, which may 

be more familiar to them.12 The 

Exchange states that offering options on 

the Trust will benefit investors by 

providing them with an additional, 

relatively lower cost investing tool to 

gain exposure to spot ether as well as a 

hedging vehicle to meet their 

investment needs in connection with 

ether products and positions.13 In 

addition, the Exchange states that, 

similar to other commodity ETFs in 

which options may be listed on ISE (e.g. 

SPDR® Gold Trust, the iShares COMEX 

Gold Trust, the iShares Silver Trust, or 

the ETFS Gold Trust), the proposed ETF 

is a trust that essentially offers the same 

objectives and benefits to investors.14

The Exchange states that options on 

the Trust will trade in the same manner 

as options on other ETFs on the 

Exchange, and that Exchange rules that 

currently apply to the listing and 

trading of all options on ETFs on the 

Exchange, including, for example, rules 

that govern listing criteria, expirations, 

exercise prices, minimum increments, 

position and exercise limits, margin 

requirements, customer accounts and 

trading halt procedures, will apply to 

the listing and trading of options on the 


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