Federal Register / Vol. 80, No. 18 / Wednesday, January 28, 2015 / Notices 4611 

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). 

5The Program was made available to all options 

traders. However, any interested party must first 

become a Participant (in addition to meeting the 

Program’s eligibility criteria and making the initial 

cash payment) in order to participate in the 

Program. 

6 15 U.S.C. 78s(b)(3)(A)(ii). 

7 17 CFR 240.19b–4(f)(2). 

8 15 U.S.C. 78s(b)(1). 

9 17 CFR 240.19b–4. 

10A maximum of 600 VPRs may be issued in 

connection with the Program (30 Tranches × 20 

VPRs per Tranche). If the Program is 

oversubscribed, Tranches will be allocated on a prorata basis, rounded to the nearest whole Tranche, 

subject to the minimum of two Tranches. 

11 8.5 Class C Units will equal approximately 

0.05% of the fully diluted equity of Holdings, 

assuming all 600 VPRs are subscribed. The total 

equity ownership of Holdings held by any one 

Subscriber will be limited to 20%. 

12The Industry ADV for a period is calculated by 

multiplying (i) two (2) times (ii) the quotient of (A) 

the aggregate number of cleared U.S. options 

transactions executed on a U.S. national exchange 

or facility thereof in U.S. listed securities on trading 

days during the period, as reported by the Options 

Clearing Corporation (‘‘OCC’’), divided by (B) the 

number of trading days during the period. A 

‘‘trading day’’ is generally any day on which the 

BOX market is open for business, subject to certain 

qualifications to be defined in the Members 

Agreement. Certain industry transactions are 

excluded from the calculation of Industry ADV as 

described below. 

13The first measurement quarter is expected to 

begin measuring order flow on January 12, 2015, 

and end on March 31, 2015, and thus the first 

measurement period will be slightly shorter than a 

standard measurement quarter. 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–74114; File No. SR–BOX– 

2015–03] 

Self-Regulatory Organizations; BOX 

Options Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Implement 

an Equity Rights Program 

January 22, 2015. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on January 9, 

2015, BOX Options Exchange LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘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 

Commission a proposed rule change to 

implement an equity rights program, to 

be effective January 12, 2015. There are 

no proposed changes to any rule text. 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to implement 

an equity rights program (the 

‘‘Program’’) in which BOX Options 

Participants registered with the 

Exchange for purposes of participating 

in options trading on the BOX market, 

a facility of the Exchange (‘‘BOX’’), as an 

order flow provider or market maker 

(‘‘Participants’’) may elect to 

participate.5

The Exchange is submitting two 

proposed rule changes with the 

Commission in connection with 

implementation of the Program. First, 

the Exchange is submitting this 

proposed rule change under Section 

19(b)(3)(A)(ii) of the Securities 

Exchange Act of 1934 (the ‘‘Act’’) 6 and 

Rule 19b–4(f)(2) thereunder,7 for 

immediate effectiveness, inasmuch as it 

establishes or changes a due, fee, or 

other charge imposed by the Exchange. 

Second, the Exchange will be 

submitting a separate proposed rule 

change under Section 19(b)(1) of the 

Act 8 and Rule 19b–4 thereunder,9

subject to Commission approval, to 

make changes to its company 

governance documents, including to 

accommodate aspects of the Program 

that involve or affect the Subscription 

Agreement and proposed Members 

Agreement and the Amended and 

Restated Limited Liability Company 

Agreement (‘‘Restated LLC Agreement’’) 

of BOX Holdings Group LLC 

(‘‘Holdings’’), an affiliate of the 

Exchange. As discussed in greater detail 

below, the aspects of the Program that 

require changes to the company 

governance documents, including the 

acquisition of equity ownership in 

Holdings and any right related to such 

ownership, are contingent upon 

Commission approval of the company 

governance proposed rule change. 

Participants that elect to participate in 

the Program will have the right to 

acquire equity in, and receive 

distributions from, Holdings, an affiliate 

of the Exchange, in exchange for the 

achievement of certain order flow 

volume commitment thresholds on the 

Exchange over a period of five (5) years 

and a nominal initial cash payment. The 

purpose of the Program is to promote 

the long-term interests of the Exchange 

by providing incentives designed to 

encourage Participants and Holdings 

owners to contribute to the growth and 

success of BOX by being active liquidity 

providers and takers to provide 

enhanced levels of trading volume to 

BOX, through an opportunity to 

increase their proprietary interests in 

BOX’s enterprise value. 

Upon initiation of the Program by 

Holdings, Participants that elect to 

participate in the Program, meet the 

eligibility criteria and make the initial 

cash payment (‘‘Subscribers’’) will be 

issued Volume Performance Rights 

(‘‘VPRs’’) in tranches of twenty (20) 

VPRs (each, a ‘‘Tranche’’). There will be 

a minimum subscription of two 

Tranches. A maximum of thirty (30) 

Tranches could be issued in connection 

with the Program.10

Each VPR will include 8.5 unvested 

new Class C Membership Units of 

Holdings (‘‘Class C Units’’) 11 and an 

average daily transaction volume 

commitment (‘‘VPR Volume 

Commitment’’) with respect to 

Qualifying Contract Equivalents equal to 

0.0055% of the Industry ADV 12 for a 

total of five (5) years (twenty (20) 

consecutive measurement quarters).13

The VPR Volume Commitment 

threshold will change based on the 

movement of the Industry ADV. 

There are four categories of Contract 

Equivalents, which are based on the 

Participant account types set forth in the 

Exchange’s Fee Schedule: 

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4612 Federal Register / Vol. 80, No. 18 / Wednesday, January 28, 2015 / Notices 

14A ‘‘Professional’’ Customer is defined in 

Exchange Rule 100(a)(50) to mean ‘‘any person or 

entity that (i) is not a broker or dealer in securities, 

and (ii) places more than 390 orders in listed 

options per day on average during a calendar month 

for its own beneficial account(s).’’ 

15 Distributions on Class C Units will not be paid 

until the Commission approves the related rule 

change filed by the Exchange concerning revisions 

to its company governance documents. 

Distributions payable on Class C Units that accrue 

before Commission approval of the related company 

governance rule filing will be held in a segregated 

account until Commission approval is obtained. If 

the Commission does not approve the related 

company governance rule filing by July 1, 2016, a 

Subscriber may terminate its Subscription 

Agreement with Holdings and any and all 

distributions with respect to that Subscriber held in 

the segregated account will be released back to 

Holdings and distributed to existing Members in 

accordance with the terms of the Article 8 of the 

LLC Agreement. 

16Article 8 of the LLC Agreement generally 

describes, and the Restated LLC Agreement 

generally will describe, how the distribution 

amounts will be calculated. 

17 ‘‘Annual Volume Commitment’’ is calculated, 

with respect to any measurement year for any Class 

C Member, by multiplying (i) the number of VPRs 

held by such Class C Member as of the first day of 

the measurement year by (ii) the VPR Volume 

Commitment for such measurement year. The first 

measurement year’s Annual Volume Commitment 

will be reduced as part of a phase-in period as 

described below. 

18 ‘‘Quarterly Volume Commitment’’ is calculated 

with respect to any measurement quarter for any 

Class C Member, by multiplying (i) the number of 

VPRs held by such Class C Member as of the first 

day of the measurement quarter by (ii) the VPR 

Volume Commitment for such measurement 

quarter. 

19Notwithstanding, the Program is currently 

designed to allow for an initial phase-in period 

during the first two measurement quarters of the 

Program, during which each Subscriber’s Quarterly 

Volume Commitment will be reduced to 40% for 

the first measurement quarter and 70% for the 

second measurement quarter. All subsequent 

measurement quarters will require a 100% 

Quarterly Volume Commitment. As such, for the 

first measurement year, each Subscriber’s Annual 

Volume Commitment will be 77.5% of the Annual 

Volume Commitment calculation. 

20For the sake of clarity, a portion of the shortfall 

can be made up in either or both measurement 

quarters in the ‘‘make-up’’ period. 

• Public Customer: 0.71 executed 

orders equates to one (1) Contract 

Equivalent. 

• Market Maker: 1.10 executed orders 

equates to one (1) Contract Equivalent. 

• Broker/Dealer: 1.35 executed orders 

equates to one (1) Contract Equivalent. 

• Professional Customer: 14 1.35 

executed orders equates to one (1) 

Contract Equivalent. 

The escalation of the weight assigned 

to each category is generally consistent 

with the fees charged to each account 

type in the Exchange’s Fee Schedule. 

Qualifying Contract Equivalents are 

Contract Equivalents, other than 

Excluded Member Contracts (described 

below), executed by a Class C Member 

(or its affiliates) on the Exchange either 

for its own account or for a customer, 

including orders routed to the Exchange 

by such Class C Member (or its 

affiliates). 

All holders of Holdings’ outstanding 

equity, including Subscribers holding 

Class C Units (‘‘Class C Members’’), are 

eligible to receive an annual 

distribution, distributed on a pro-rata 

basis, equal to 95% of Holdings’ 

consolidated net income, plus 

depreciation and less capital 

expenditures, subject to availability.15

Any such distribution amounts will be 

calculated after taking into account all 

financial and regulatory needs of the 

Exchange, as determined by the 

Exchange.16 Distributions are payable 

on Class C Units associated with both 

vested and unvested VPRs. Distributions 

to Subscribers will be based on the 

Subscriber’s achievement of its Annual 

Volume Commitment 17 for that year. If 

a Subscriber achieves at least 100% of 

its Annual Volume Commitment for all 

of the VPRs it holds for the distribution 

year, the Subscriber will receive its full 

distribution on its Class C Units. If a 

Subscriber achieves less than 100%, but 

at least 70%, of its Annual Volume 

Commitment, its distribution on its 

Class C Units will be prorated. If a 

Subscriber achieves less than 70% of its 

Annual Volume Commitment, it will 

receive no distribution on its Class C 

Units. Any unpaid distributions 

resulting from failure of Subscribers to 

achieve their Annual Volume 

Commitments during the measurement 

year will first be redistributed pro-rata 

to Subscribers that achieved volume in 

excess of their Annual Volume 

Commitment for the measurement year, 

with a maximum redistributed 

distribution amount equal to the 

Subscriber’s regular distribution 

multiplied by the percent by which its 

transaction volume exceeded its Annual 

Volume Commitment for that 

measurement year. Distributions 

available for redistribution that are not 

redistributed to Subscribers will be 

redistributed pro-rata to holders of 

Holdings’ other classes of equity 

securities: Class A Membership Units 

and Class B Membership Units 

(collectively with the Class C Units, 

‘‘Units’’). 

One VPR per Tranche will be eligible 

to vest each quarter of the five (5) year 

Program period, subject to the 

Subscriber meeting its Quarterly 

Volume Commitment 18 for all VPRs it 

holds for that quarter. In addition, 

Subscribers may earn additional VPRs 

or lose VPRs upon exceeding or failing 

to meet their VPR Volume 

Commitments during the Program 

period, as detailed below. 

If a Subscriber fails to meet its 

Tranche Volume Commitment 

(calculated as VPR Volume 

Commitment × 20 for a full Tranche) for 

a measurement quarter, a VPR eligible to 

vest for that Tranche in that quarter will 

not vest.19 However, for any 

measurement quarter in which a 

Subscriber achieves less than 100%, but 

at least 70%, of its Tranche Volume 

Commitment, the Subscriber may ‘‘make 

up’’ the shortfall for vesting purposes by 

achieving order flow during the next 

two consecutive measurement quarters 

at least equal to its requisite Quarterly 

Volume Commitment for each quarter 

plus the shortfall amount for that 

Tranche.20 If the shortfall is so ‘‘made 

up,’’ one VPR per Tranche will vest at 

the end of the measurement quarter in 

which the shortfall is made up, in 

addition to any other VPRs that would 

otherwise vest. If a Subscriber fails to 

‘‘make up’’ the shortfall within the two 

immediately subsequent measurement 

quarters, or if a Subscriber fails to meet 

at least 70% of its Tranche Volume 

Commitment, the VPR eligible to vest 

for that Tranche will fail to vest and 

become available to be reallocated to 

interested Subscribers to the extent such 

interested Subscribers achieved order 

flow volume above their Quarterly 

Volume Commitment for that 

measurement quarter. If a Subscriber 

exceeds 100% of its Quarterly Volume 

Commitment in any measurement 

quarter, the Subscriber will be eligible 

to earn reallocated VPRs from the pool 

of VPRs available for reallocation. The 

number of VPRs received in such 

reallocation will depend upon the 

Subscriber’s achieved volume in excess 

of its Quarterly Volume Commitment 

and the extent to which other 

Subscribers miss or exceed their own 

Quarterly Volume Commitments. 

In addition to the reallocation of 

individual VPRs described above, if a 

Subscriber fails to meet its Tranche 

Volume Commitment for one or more 

Tranches in at least two (which need 

not be consecutive) measurement 

quarters, including after any applicable 

‘‘make up’’ period as described above, 

all of the Subscriber’s VPRs in such 

Tranche(s), whether vested or unvested, 

will become available to be reallocated 

to interested Subscribers to the extent 

such interested Subscribers achieved, 

on average from the beginning of the 

Program through the most recent 

measurement quarter, order flow 

volume above their applicable Quarterly 

Volume Commitment. If a Subscriber, 

on average from the beginning of the 

Program through the most recent 

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Federal Register / Vol. 80, No. 18 / Wednesday, January 28, 2015 / Notices 4613 

21 ‘‘Strategic Transactions’’ will be defined in the 

Members Agreement and will include any 

transaction in a product that, with respect to any 

day on which BOX is open for business, is one of 

the top twenty (20) highest equity or ETF volume 

products reported by the OCC for such trading day 

and for which a majority of the volume of cleared 

transactions in such product reported by OCC 

consists of executed and cleared transactions 

involving: (i) Reveals and conversions; (ii) dividend 

spreads; (iii) deep-in-the-money call and put 

spreads; (iv) short stock interest spreads; (v) merger 

spreads; (vi) box spreads; or (vii) jelly rolls. This 

definition will be subject to change by subsequent 

amendment of the Members Agreement. Strategic 

Transactions will be excluded from the VPR 

Volume Commitment calculation to the extent it is 

possible to identify such transactions. 

22Any purported transfer of Class C Units or 

ownership of Class C Units in violation of this 20% 

ownership limit by a Subscriber will be subject to 

limitations set forth in the Restated LLC Agreement, 

including the non-recognition of voting rights of 

Class C Units in excess of the 20% ownership limit. 

23The Members Agreement will provide that only 

Class C Members will be able to designate members 

to the Advisory Committee. 

24The Restated LLC Agreement will provide that 

existing Holdings Members will continue to have 

the right to designate a director to the Holdings 

board of directors. Each Class A or Class B Member 

will have the right to appoint one (1) director to the 

Holdings board of directors if it owns in excess of 

2.5% of all outstanding Units. In addition, any 

Member that owns greater than 14% and 28% of all 

outstanding Units will have the right to appoint two 

(2) and three (3) directors, respectively. No Member 

will be allowed to designate more than three (3) 

directors to the Holdings board of directors. 

25MX US 2, Inc., which is indirectly owned by 

TMX Group, Inc., a Canadian entity, currently owns 

approximately 54% of Holdings. 

26Article 16, Section 16.1 of the LLC Agreement 

generally provides, and the Restated LLC 

Agreement generally will provide, that, so long as 

MX US 2, Inc. and its affiliates own 4% or more 

of Holdings, it shall not invest in more than 5% or 

participate in the creation and/or operation of a 

competing business. 

27Section 4.4 of the LLC Agreement generally 

provides, and the Restated LLC Agreement 

generally will provide, that certain Major Actions 

(as defined therein) shall not be effective unless 

approved by the Holdings board of directors, 

including all of the directors designated by each of 

MX US 2, Inc. and IB Exchange Corp. Further, the 

Restated LLC Agreement will provide that Sections 

4.4 and 14.12 of the BOX Market LLC Agreement 

will also be amended, at the same time as the 

Holdings Major Actions provision expires, to 

provide that the corresponding provisions in the 

BOX Market LLC Agreement relating to Major 

Actions (as defined therein) will have no further 

effect. 

measurement quarter, exceeds 100% of 

its Quarterly Volume Commitment, the 

Subscriber will be eligible to earn 

reallocated VPRs from the pool of such 

Tranches available for reallocation. The 

number of VPRs received in such 

reallocation will depend upon the 

Subscriber’s achieved volume, on 

average from the beginning of the 

Program through the most recent 

measurement quarter, in excess of its 

applicable Quarterly Volume 

Commitment and the extent to which 

other Subscribers miss or exceed their 

own Quarterly Volume Commitments. 

Notwithstanding the foregoing, once a 

Subscriber has achieved forty (40) 

vested VPRs, and subsequently when 

each additional level of twenty (20) 

VPRs vest, those VPRs will become 

protected from reallocation. 

Any reallocated VPR will come with 

the same Class C Units ownership rights 

and VPR Volume Commitment 

obligations. If the number of VPRs 

available for reallocation is insufficient 

to reallocate fully to all eligible 

Subscribers, the available VPRs will be 

relocated on a pro-rata basis based on 

each eligible Subscriber’s percentage of 

the aggregate excess volume achieved by 

all eligible Subscribers. If the number of 

VPRs available for reallocation exceeds 

the interest or availability of eligible 

Subscribers, Holdings may cancel any 

such excess VPRs not reallocated. 

As noted above, only Qualifying 

Contract Equivalents will be included in 

the calculation of a Subscriber’s VPR 

Volume Commitment. The following 

Excluded Member Contracts are not 

Qualifying Contract Equivalents, and 

thus will not count towards a 

Subscriber’s VPR Volume Commitment: 

(1) Excluded Industry Transactions, i.e., 

executed and cleared transactions (i) in 

a proprietary product traded on a U.S. 

equity options exchange other than the 

Exchange (and not traded on the 

Exchange), (ii) that are Strategic 

Transactions,21 or (iii) that are otherwise 

agreed to be Excluded Industry 

Transactions by Holdings and holders of 

at least a majority of the outstanding 

Class C Units (including both vested 

and unvested Class C Units) in writing; 

(2) transactions that the Class C Member 

has notified Holdings shall not be 

credited to such Member for purposes of 

calculating the Member’s actual order 

volume; (3) transactions determined to 

have been in violation of any applicable 

law, statute, regulation, rule, official 

directive or guideline (whether or not 

having the force of law) of any 

governmental authority with legal 

jurisdiction or of any self-regulatory 

organization with supervisory authority; 

and (4) transactions with respect to 

which it is unlawful for the Class C 

Member to receive compensation. 

Any disputes with respect to 

Quarterly Volume Commitment 

calculations may be appealed to the 

Holdings board of directors. If such 

dispute is not resolved within sixty (60) 

calendar days following the end of any 

applicable measurement quarter, 

Subscribers may request the dispute be 

resolved by an independent accounting 

firm appointed by a majority of the 

Subscribers requesting the audit and 

reasonably acceptable to Holdings. 

As noted above, the Exchange will be 

submitting a separate proposed rule 

change, subject to Commission 

approval, to make changes to its 

company governance documents to 

accommodate certain aspects of the 

Program that involve or affect the rights 

and limitations associated with Class C 

Unit ownership. For example, the total 

equity ownership of all classes of Units 

held by any one Subscriber will be 

limited to 20%.22 Also, the Restated 

LLC Agreement will provide that 

Subscribers will have the right to vote 

the Class C Units associated with vested 

VPRs on matters submitted for a vote of 

all holders of Units, and the Class C 

Units will vote with all other classes of 

Units as a single class. Subscribers will 

also have the right to designate one 

individual to a new Advisory 

Committee organized by Holdings, 

whose purpose will be to advise and 

make recommendations to Holdings 

with respect to the Exchange’s 

competitiveness in the marketplace.23 In 

addition, Subscribers with Class C Units 

associated with vested VPRs that 

represent greater than 4% of all 

outstanding Units will have the right to 

appoint one (1) director to the Holdings 

board of directors.24 As noted, these and 

other rights associated with Class C Unit 

ownership are contingent upon 

Commission approval of the company 

governance rule filing. 

The Program will also foster key 

changes to the governance of Holdings, 

assuming Commission approval of the 

separate company governance proposed 

rule change. The Program will foster the 

removal of MX US 2, Inc.25 from being 

a direct majority owner of Holdings. 

Assuming full participation in the 

Program, the ownership of Holdings by 

current Unitholders, including MX US 

2, Inc., will be diluted such that no 

single Unitholder will have a majority 

ownership of Holdings. Also, upon 

vesting of VPRs associated with Class C 

Units equal to at least 10% of the total 

outstanding Units, the non-compete 

obligations applicable to MX US 2, Inc. 

in the Restated LLC Agreement will 

expire and be of no further effect, 

automatically and without further 

action.26 In addition, upon vesting of 

VPRs associated with Class C Units 

equal to at least 25% of the total 

outstanding Units, the Major Action 

veto for the benefit of MX US 2, Inc. and 

IB Exchange Corp. in the Restated LLC 

Agreement will expire and be of no 

further effect, automatically and without 

further action.27 Finally, the Restated 

LLC Agreement will include a 

requirement that, subject to the other 

provisions of the Restated LLC 

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4614 Federal Register / Vol. 80, No. 18 / Wednesday, January 28, 2015 / Notices 

28The Restated LLC Agreement will set forth the 

terms and conditions of this ‘‘supermajority’’ 

provision. 

29Because, as noted above, the acquisition of 

equity ownership in Holdings, and any right related 

to such ownership, in connection with a 

Subscriber’s participation in the Program is 

contingent upon Commission approval of the 

related company governance rule change, the initial 

cash payment will be held in escrow until the 

Commission approves the related company 

governance rule change. As disclosed to the 

Subscribers and provided in the Subscription 

Agreement, if the Commission does not approve the 

related company governance rule change by July 1, 

2016, any Subscriber will be authorized to 

terminate its Subscription Agreement with the 

Holdings, upon which Holdings will promptly 

refund the terminating Subscriber’s initial cash 

payment. 

30See, e.g., Securities Exchange Act Release No. 

62358 (June 22, 2010), 75 FR 37861 (June 30, 2010) 

(SR–NSX–2010–006) (Notice of Filing and 

Immediate Effectiveness of National Stock 

Exchange, Inc. equity rights program); Securities 

Exchange Act Release No. 64742 (June 24, 2011), 76 

FR 38436 (June 30, 2011) (SR–NYSEAmex–2011– 

018) (Order Approving NYSE Amex LLC (now 

NYSE MKT LLC) options facility, including a 

volume-based equity plan); Securities Exchange Act 

Release No. 69200 (March 21, 2013), 78 FR 18657 

(March 27, 2013) (SR–CBOE–2013–031) (Notice of 

Filing and Immediate Effectiveness of CBOE Stock 

Exchange, LLC equity rights program); and 

Securities Exchange Act Release No. 70498 

(September 25, 2013), 78 FR 60348 (October 1, 

2013) (SR–MIAX–2013–043) (Notice of Filing and 

Immediate Effectiveness of Miami International 

Securities Exchange, LLC equity rights program). 

Agreement, including the Major Action 

veto discussed above, holders of at least 

67% of all outstanding Units must vote 

to approve certain major company 

actions by Holdings.28 As noted, these 

and other governance changes are 

contingent upon Commission approval 

of the company governance rule filing. 

Any Participant may elect to 

subscribe to the Program subject to its 

satisfaction of eligibility requirements 

and making the initial cash payment. 

All applicant Participants will be 

subject to the same eligibility and 

designation criteria and all Subscribers 

will participate in the Program on the 

same terms, conditions and restrictions. 

To be designated as a Subscriber, an 

applicant must: (i) Represent and 

warrant that no grounds exist for the 

suspension or termination of the 

Subscriber’s voting privileges or 

membership under the Limited Liability 

Company Agreement of Holdings, as 

may be amended from time to time 

(‘‘LLC Agreement’’), or the Restated LLC 

Agreement; (ii) qualify as an ‘‘accredited 

investor’’ as such term is defined in 

Rule 501(a) of Regulation D 

promulgated under the Securities Act of 

1933 (the ‘‘Securities Act’’); and (iii) 

have executed all required 

documentation for Program 

participation. In addition, the applicant 

must make a nominal cash payment of 

$10 per Class C Unit (which equates to 

$85 per VPR) by January 12, 2015, and 

subscribe to a minimum of two 

Tranches of 20 VPRs, for a total 

minimum initial cash payment of 

$3,400.29 Once a Participant becomes a 

Subscriber, Holdings may cancel any 

VPR held by the Subscriber if the 

Subscriber’s membership in Holdings is 

terminated as provided in the LLC 

Agreement or Restated LLC Agreement. 

Neither VPRs nor Class C Units are 

expected to be registered for resale by 

Holdings and may not be transferred 

without complying with, or qualifying 

for an exemption from, the registration 

requirements of the Securities Act. Any 

transfer of Class C Units by an existing 

Class C Member will be subject to a 

primary right of first refusal for the 

benefit of Holdings and a secondary 

right of first refusal for the benefit of 

other Class C Members. 

Notwithstanding the foregoing, a Class C 

Member may transfer all of its rights and 

obligations related to the VPRs and 

Class C Units it holds to any affiliate 

without the consent of Holdings so long 

as, among other things, the affiliate is 

admitted as a member of Holdings as 

provided in the Restated LLC 

Agreement and becomes a party to, and 

bound by the terms and conditions of, 

the Members Agreement. Upon 

completion of all 20 measurement 

quarters (plus any applicable ‘‘make up’’ 

period), assuming Commission approval 

of the related company governance rule 

filing discussed above, all outstanding 

Class C Units associated with vested 

VPRs will be automatically converted 

into Class A Membership Units, and all 

outstanding Class C Units associated 

with unvested VPRs will be 

automatically cancelled. 

As discussed above, the purpose of 

the Program is to encourage Participants 

to direct greater trade volume to the 

Exchange to enhance trading volume in 

BOX. Toward that end, the Exchange 

has reached out to known options 

traders—both Participants and nonParticipants—to gauge interest in the 

Program, including whether the 

Program would induce non-Participants 

to become Participants and, once 

Participants, direct trading volume to 

BOX. Increased volume will provide for 

greater liquidity and enhanced price 

discovery, which benefits all market 

participants. Other exchanges currently 

engage in the practice of incentivizing 

increased order flow in order to attract 

liquidity providers through equity 

sharing arrangements.30 The Program 

similarly intends to attract order flow, 

which will increase liquidity, thereby 

providing greater trading opportunities 

and tighter spreads for other market 

participants and causing a 

corresponding increase in order flow 

from these other market participants. 

The Program will similarly reward the 

liquidity providers that provide this 

additional volume with a potential 

proprietary interest in BOX. 

As discussed above, the acquisition of 

Class C Units, and any right related to 

such ownership, in connection with the 

Program is contingent upon 

Commission approval of the company 

governance proposed rule change by 

July 1, 2016, after which a Subscriber 

may terminate its participation in the 

Program. This contingency will be a 

known risk to Subscribers: The 

Subscription Agreement, which all 

Subscribers must sign by January 12, 

2015, will disclose that the purchase of 

Class C Units is contingent upon, among 

other things, Commission approval of 

the Program. In addition, the 

Membership Agreement, which all 

Subscribers must sign by January 12, 

2015, will disclose that BOX will begin 

measuring order flow volume for the 

Program on January 12, 2015. 

Accordingly, Subscribers will be aware 

that they may send order flow to BOX 

in connection with the Program in 

advance of Commission approval, and 

that there is a risk that the Program is 

not approved by the Commission and 

that they never receive the Class C Units 

or the rights associated therewith. 

In addition, the Exchange has taken 

steps to minimize the risk that the 

Program does not become fully 

operational and the related costs 

imposed on Subscribers if such risk is 

realized. For example, all internal 

approvals and consents required to 

operate the Program, including approval 

by the Holdings board of directors of the 

Subscription Agreement, Membership 

Agreement and amendments to the 

Restated LLC Agreement, will be 

obtained in advance of commencement 

of the Program. Besides Commission 

approval, there will be no other 

governmental or regulatory approval 

required to operate the Program. Also, 

regardless of if and when Commission 

approval is obtained, Subscribers will 

continue to be required to pay fees in 

accordance with the same published 

Exchange Fee Schedule to which all 

Participants are subject. In addition, 

Subscribers are not guaranteed 

distributions; any distribution to 

holders of Holdings equity (including 

Class C Members) is contingent upon, 

among other things, the profitability of 

Holdings, and nothing in the 

Subscription Agreement or Members 

Agreement guarantees the payment of 

any distributions to Subscribers. 

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Federal Register / Vol. 80, No. 18 / Wednesday, January 28, 2015 / Notices 4615 

31 In addition, as noted above, the Subscription 

Agreement will provide that, upon such 

termination, Holdings will promptly return the 

terminating Subscriber’s initial cash payment. 

32 15 U.S.C. 78f(b). 

33 15 U.S.C. 78f(b)(5). 

34 Id. 35 15 U.S.C. 78f(b)(4). 36 In addition, as noted above, the Subscription 

Agreement will provide that, upon such 

termination, Holdings will promptly return the 

terminating Subscriber’s initial cash payment. 

37See supra note 21 for a description of the types 

of ‘‘Strategic Transactions.’’ 

38The Exchange believes that including 

transactions executed in violation of applicable law, 

particularly, would not be consistent with the 

purposes of the Act. 

Finally, the Subscription Agreement 

will set forth the right of each 

Subscriber to terminate the Subscription 

Agreement if the Commission does not 

approve the proposed company 

governance rule change by July 1, 2016 

or if the Subscriber’s participation in the 

Program is legally prohibited before 

issuance of the Class C Units.31

Accordingly, the only potential ‘‘cost’’ 

to Subscribers if Commission approval 

is not obtained by July 1, 2016, would 

be that they would have sent order flow 

to BOX with the hope of receiving an 

equity interest and related rights, which 

they knew were not guaranteed. 

The VPR Volume Commitment 

threshold was set based upon business 

determinations, including increasing 

diversity of Holdings’ ownership and an 

analysis of current volume levels. The 

specific Contract Equivalent categories 

were defined and weighted in 

accordance with the Exchange’s Fee 

Schedule, such that those categories that 

earn higher fees are weighted more 

heavily. The VPR Volume Commitment 

threshold and Contract Equivalent 

categories are intended to incentivize 

firms to increase the number of orders 

that are sent to BOX. Increasing the 

number of orders that are sent to BOX 

will in turn provide tighter and more 

liquid markets, and therefore attract 

more business as well. 

BOX intends to begin measuring order 

flow volume for the Program on January 

12, 2015. The Exchange notified 

Participants of the Program by 

Regulatory Circular published on 

October 1, 2014. The Exchange will also 

post a copy of this rule filing on its Web 

site. Any Participant that is interested in 

participating in the Program may 

contact BOX for more information and 

legal documentation and will be 

required to enter into a nondisclosure 

agreement regarding this additional 

Program information. 

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.32 Specifically, 

the Exchange believes that its proposed 

rule change is consistent with Section 

6(b)(5) of the Act 33 in that it is 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 facilitating 

transactions in securities, to remove 

impediments to and perfect the 

mechanisms 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 

requirement in Section 6(b)(5) of the 

Act 34 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) of the Act,35 which requires that 

exchange rules provide for the equitable 

allocation of reasonable dues, fees, and 

other charges among its members and 

other persons using its facilities. 

In particular, the proposed rule 

change is equitable and not unfairly 

discriminatory because all Participants 

may elect to participate (or elect to not 

participate) in the Program and earn 

vested VPRs on the same terms and 

conditions, assuming they satisfy the 

same eligibility criteria as described 

above. The eligibility criteria are 

objective; thus, all Participants have the 

same opportunity to satisfy them. Also, 

Holdings is offering VPRs, including 

Class C Units, to any Participant that 

requests designation to participate in 

the Program and otherwise satisfies the 

eligibility criteria to ensure that all 

Participants will have the opportunity 

to subscribe for VPRs and the associated 

Class C Units and thus participate in the 

Program if they so choose. In addition, 

VPRs will vest based on achievement of 

a predetermined VPR Volume 

Commitment threshold during each 

measurement period that will apply 

evenly to all Subscribers. Further, each 

Subscriber will have the right to 

terminate its Subscription Agreement if 

the Commission does not approve the 

proposed company governance rule 

change by July 1, 2016 or if the 

Subscriber’s participation in the 

Program is legally prohibited before 

issuance of the Class C Units.36

The Exchange believes that the 

methodology used to calculate the VPR 

Volume Commitment threshold is fair, 

reasonable and not unfairly 

discriminatory because it is based on 

objective criteria that are designed to 

omit from the calculation functionality 

that is not available on the Exchange 

and types of transactions that are subject 

to little or no transaction fees. 

Specifically, as noted above, the VPR 

Volume Commitment calculation only 

includes Qualifying Contract 

Equivalents, which excludes the 

following Excluded Member Contracts: 

• Excluded Industry Transactions, 

i.e., executed and cleared transactions: 

Æ In a proprietary product traded on 

a U.S. equity options exchange other 

than the Exchange (and not traded on 

the Exchange); 

Æ that are Strategic Transactions; 37 or 

Æ that are otherwise agreed to be 

Excluded Industry Transactions by 

Holdings and holders of at least a 

majority of the outstanding Class C 

Units (including both vested and 

unvested Class C Units) in writing; 

• Transactions that the Class C 

Member has notified Holdings shall not 

be credited to such Member for 

purposes of calculating the Member’s 

actual order volume. 

• Transactions determined to have 

been in violation of any applicable law, 

statute, regulation, rule, official 

directive or guideline (whether or not 

having the force of law) of any 

governmental authority with legal 

jurisdiction or of any self-regulatory 

organization with supervisory authority. 

• Transactions with respect to which 

it is unlawful for the Class C Member to 

receive compensation. 

The Exchange believes excluding 

Strategic Transactions and transactions 

in proprietary products traded on a U.S. 

options exchange other than the 

Exchange is reasonable and not unfairly 

discriminatory because, at this time, 

these transactions generally are not 

executed on the Exchange, and thus do 

not contribute to the purpose behind the 

Program of incentivizing Participants to 

send order flow to BOX. The Exchange 

further believes it is reasonable and not 

unfairly discriminatory to exclude 

transactions determined to have been 

executed in violation of applicable 

law 38 and transactions for which it is 

unlawful for the Subscriber to receive 

compensation, because the Exchange 

does not want to incent or reward the 

execution of unlawful transactions. The 

Program is designed to reward 

Subscribers for bringing orders to be 

executed on the Exchange; the 

distribution reward is primarily based 

on the profitability of Holdings, which 

is directly related to the fees earned by 

the Exchange. The foregoing 

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4616 Federal Register / Vol. 80, No. 18 / Wednesday, January 28, 2015 / Notices 

39Because Class C Unit ownership will be subject 

to a 20% cap, no one Subscriber will be able to, by 

vote, require a transaction to be excluded for all 

Subscribers. 

40 It is not uncommon for exchanges to treat 

certain market participants in a disparate manner, 

particularly in the Fee Schedule. For example, the 

Fee Schedules of the Chicago Board Options 

Exchange, Incorporated (‘‘CBOE’’) and the 

International Securities Exchange (‘‘ISE’’), among 

other exchanges, charge different fees based on the 

customer type, including Customer, Market Maker, 

Broker/Dealer and Professional. See CBOE Fees 

Schedule (Sept. 2, 2014), available at http://

www.cboe.com/publish/feeschedule/

CBOEFeeSchedule.pdf and ISE Schedule of Fees 

(last updated Aug. 1, 2014), available at http://

www.ise.com/fees. 

41See Exchange Rule 100(a)(50), which defines 

the term ‘‘Professional.’’ 

transactions, in which no transaction 

fees are earned by the Exchange, do not 

contribute to the profitability of 

Holdings. Finally, the Exchange believes 

it is reasonable and not unfairly 

discriminatory to exclude transactions 

that the Subscriber has notified 

Holdings should not be credited to such 

Subscriber for purposes of calculating 

such Subscriber’s actual order volume, 

and transactions otherwise agreed to be 

excluded by Holdings and holders of at 

least a majority of the outstanding Class 

C Units, because these exclusions 

permit flexibility in the Program to 

allow Subscribers to account for 

business arrangements with affiliates 

and third parties, including execution 

arrangements through other Subscribers 

in the Program, allow Subscribers to 

voice possible concerns and opinions, 

and allow Subscribers to modify the 

order types that can contribute to 

meeting the VPR Volume Commitment, 

either individually by and for the 

Subscriber itself, or by majority vote 39

for all Subscribers. 

Further, the Exchange believes the 

definition of, and weight assigned to, 

each Contract Equivalent category is 

fair, reasonable and not unfairly 

discriminatory because each category is 

defined and weighted in accordance 

with the Exchange’s Fee Schedule, so 

that those categories that earn higher 

fees are weighted more heavily.40

Although the different Contract 

Equivalent categories are weighted 

differently, the weighting is equitable, 

and strikes an appropriate balance based 

on the quantity of orders executed and 

the type of account. The Public 

Customer category is assigned the 

lowest weight (0.71) because these 

orders are charged the lowest fees by the 

Exchange, and the Exchange believes 

low customer transaction fees are 

reasonable, appropriate and consistent 

with the Act because it promotes the 

best interests of investors to have lower 

transaction costs for Public Customers 

and attract Public Customer order flow 

to BOX. The Market Maker category is 

assigned more weight (1.10) because 

these orders generate higher fees 

designed to be comparable to the fees 

that such accounts would be charged at 

competing venues. The Professional 

Customer and Broker/Dealer Firm 

categories are assigned the most weight 

(1.35) because these orders generate the 

highest fees for the Exchange and, again, 

are designed to be comparable to fees 

charged by competing options 

exchanges. By definition, a Professional 

Customer places more than 390 orders 

in listed options per day on average 

during a calendar month for its own 

beneficial account(s),41 and such level 

of trading activity generates higher 

operational costs for the Exchange. 

Broker/Dealer Firms are engaged in the 

business of executing orders, and thus 

similarly generate high operational costs 

for the Exchange. Broker/Dealer Firms 

are charged higher fees than Market 

Makers because Broker/Dealer Firms do 

not have the obligations (such as 

maintaining active two-sided markets) 

that Market Makers have. Professional 

Customer and Broker/Dealer Firm 

orders are given equal weight, 

consistent with the Exchange’s Fee 

Schedule, which charges these two 

account types equal fees. The Exchange 

believes it is equitable to assign 

different weights to each account type 

based on the fee generated by that 

account type, given that the Program 

distributions are based on revenues 

earned by the Exchange. 

The Exchange believes the Program is 

equitable and reasonable because an 

increase in volume and liquidity will 

benefit all market participants by 

providing more trading opportunities 

and tighter spreads, even to those 

market participants that do not 

participate in the Program. 

Additionally, the Exchange believes the 

proposed rule change is consistent with 

the Act because, as described above, the 

Program is designed to bring greater 

volume and liquidity to the Exchange, 

which will benefit all market 

participants by providing tighter 

quoting and better prices, all of which 

perfects the mechanism for a free and 

open market and national market 

system. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange believes that the proposed 

rule change will improve competition 

by providing market participants with 

an incentive to consider and utilize 

another market, BOX, when determining 

where to execute options contracts and 

post liquidity. 

The Exchange believes that the 

proposed change will increase both 

intermarket and intramarket 

competition by incenting Subscribers to 

direct their orders to the Exchange, 

which will enhance the quality of 

quoting and increase the volume of 

contracts traded there. Notwithstanding, 

Subscribers will be free to send orders 

to other markets, even if they have not 

met their VPR Volume Commitment for 

that measurement period; thus the 

proposed change should not impose a 

burden on competition among 

exchanges. To the extent that there is an 

additional competitive burden on nonSubscribers, the Exchange believes that 

this is appropriate because the Program 

should incent Participants to direct 

additional order flow to the Exchange 

and thus provide additional liquidity, 

which enhances the quality of BOX and 

increases the volume of options traded 

on BOX. To the extent that this purpose 

is achieved, all of the Exchange’s 

Participants, even non-Subscribers, 

should benefit from the improved 

market liquidity. Enhanced market 

quality and increased transaction 

volume that results from the anticipated 

increase in order flow directed to the 

Exchange will benefit all market 

participants and improve competition 

on the Exchange. 

Given the robust competition for 

volume among options markets, many of 

which offer the same products, 

implementing a program to attract order 

flow like the one being proposed in this 

filing is consistent with the abovementioned goals of the Act. This is 

especially true for the smaller options 

markets, such as BOX, which is 

competing for volume with much larger 

exchanges that dominate the options 

trading industry. BOX has a modest 

percentage of the average daily trading 

volume in options, so it is unlikely that 

the Program could cause any 

competitive harm to the options market 

or to market participants. Rather, the 

Program is an attempt by a small 

options market to attract order volume 

away from larger competitors by 

adopting an innovative pricing strategy, 

as evidenced by the VPR Volume 

Commitment threshold of the Program 

representing a fraction of 1% of the total 

national average daily volume of 

options contracts reported to OCC. The 

Exchange notes that, if the Program 

resulted in the expected increase in the 

average daily trading volume in options 

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Federal Register / Vol. 80, No. 18 / Wednesday, January 28, 2015 / Notices 4617 

42 17 CFR 200.30–3(a)(12). 

executing on BOX, such increase will 

represent a large percentage increase for 

BOX but it will represent a minimal 

reduction in volume of its larger 

competitors in the industry. The 

Exchange believes that the Program will 

help further competition, because 

market participants will have yet 

another additional option in 

determining where to execute orders 

and post liquidity if they factor the 

benefits of the Program and BOX equity 

participation into the determination. 

Finally, the Program will increase the 

diversity of ownership of Holdings such 

that no one entity will have a majority 

ownership of Holdings. Upon the 

issuance of Class C Units to Subscribers, 

the ownership of Holdings will be 

distributed among more holders. If there 

is full participation in the Program, then 

the ownership of Holdings by current 

Unitholders will be diluted and no 

single Unitholder will have a majority 

ownership of Holdings. 

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 

Pursuant to Section 19(b)(3)(A)(ii) of 

the Act and Rule 19b-4(f)(2) thereunder 

the proposed rule change is filed for 

immediate effectiveness inasmuch as it 

establishes or changes a due, fee, or 

other charge imposed by the Exchange. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily 

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–2015–03 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–2015–03. 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 Web site (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 Web site 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; the 

Commission does not edit personal 

identifying information from 

submissions. You should submit only 

information that you wish to make 

available publicly. All submissions 

should refer to File Number SR–BOX– 

2015–03 and should be submitted on or 

before February 18, 2015. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.42

Brent J. Fields, 

Secretary. 

[FR Doc. 2015–01508 Filed 1–27–15; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

Small Business Size Standards: 

Waiver of the Nonmanufacturer Rule 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice of intent to waive the 

Nonmanufacturer Rule for Scientific 

Vacuum Pumps. 

SUMMARY: The U.S. Small Business 

Administration (SBA) is considering 

granting a class waiver of the 

Nonmanufacturer Rule for Scientific 

Vacuum Pumps. On October 1, 2014, 

SBA received a request that a class 

waiver be granted for scientific vacuum 

pumps under the North American 

Industry Classification System (NAICS) 

code 333911 (Pump and Pumping 

Equipment Manufacturing), Product 

Service Code (PSC) 4310 (Compressors 

and Vacuum Pumps). According to the 

request, no small business 

manufacturers supply this class of 

products to the Federal government. 

Thus, SBA is seeking information on 

whether there are small business 

scientific vacuum pump manufacturers. 

If granted, the waiver would allow 

otherwise qualified small businesses to 

supply the products of any 

manufacturer on a Federal contract set 

aside for small businesses, ServiceDisabled Veteran-Owned (SDVO) small 

businesses, Women-Owned small 

businesses (WOSB), Economically 

Disadvantaged Women-Owned small 

businesses (EDWOSB), or Participants 

in the SBA’s 8(a) Business Development 

(BD) program. 

DATES: Comments and source 

information must be submitted February 

12, 2015. 

ADDRESSES: You may submit comments 

and source information to Amy Garcia, 

Procurement Analyst, Small Business 

Administration, Office of Government 

Contracting, 409 3rd Street SW., Suite 

8800, Washington, DC 20416; or by way 

of email to the Nonmanufacturer Rule 

Waiver program office at 

NonMfgRuleWaiverReqsts@sba.gov. 

Email communications should contain 

‘‘Class Waiver—Scientific Vacuum 

Pumps’’ in the subject line. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Amy Garcia, Procurement Analyst, by 

telephone at (202) 205–6842; by FAX at 

(202) 481–1630; or by way of email to 

the Nonmanufacturer Rule Waiver 

program office at 

NonMfgRuleWaiverReqsts@sba.gov. 

SUPPLEMENTARY INFORMATION: Section 

8(a)(17) and 46 of the Small Business 

Act (Act), 15 U.S.C. 637(a)(17) and 657s, 

and SBA’s implementing regulations 

require that recipients of Federal supply 

contracts set aside for small businesses, 

SDVO small businesses, WOSBs, 

EDWOSBs, or Participants in the SBA’s 

8(a) BD Program provide the product of 

a small business manufacturer or 

processor, if the recipient is other than 

mstockstill on DSK4VPTVN1PROD with NOTICES