Federal Register / Vol. 87, No. 36 / Wednesday, February 23, 2022 / Notices 10265 

42The Policy would allow OCC to invest its own 

cash in longer-tenured instruments only where such 

cash is in excess of 110 percent of OCC’s Target 

Capital Requirement. 

43 17 CFR 240.17Ad–22(e)(16). 

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

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 84575 

(November 13, 2018), 83 FR 58309 (November 19, 

2018) (approving SR–NASDAQ–2018–070, as 

modified by Amendment Nos. 1–3) (‘‘Approval 

Order’’). 

4Rule 5702(a). 

5Specifically, the 2020 Filing expanded the 

categories of non-convertible bonds eligible to be 

listed under Rule 5702 to include non-convertible 

bonds of affiliates of a listed company where: A 

listed company directly or indirectly owns a 

majority interest in, or is under common control 

with, the issuer of the non- convertible bond; or a 

listed company has guaranteed the non-convertible 

bond. In addition, for un-affiliated companies, the 

2020 Filing allowed listing of non-convertible 

bonds where a nationally recognized securities 

rating organization (an ‘‘NRSRO’’) has assigned a 

current rating to the non-convertible bond that is no 

lower than an S&P Corporation ‘‘B’’ rating or 

equivalent rating by another NRSRO; or if no 

NRSRO has assigned a rating to the issue, an 

NRSRO has currently assigned (i) an investment 

grade rating to an immediately senior issue of the 

same company, or (ii) a rating that is no lower than 

an S&P Corporation ‘‘B’’ rating, or an equivalent 

rating by another NRSRO, to a pari passu or junior 

issue of the same company. 

6See Securities Exchange Act Release No. 84001 

(August 30, 2018), 83 83 FR 45289 (September 6, 

2018). 

7See Securities and Exchange Act Release No. 

86072 (June 10, 2019), 84 FR 27816 (June 14, 2020). 

8To increase the clarity of the rule, Nasdaq 

proposes to include in the proposed Listing Rule 

5702(d) other exemptions applicable to an issuer of 

a non-convertible bond, as provided by Listing Rule 

5615(a)(6)(A), which states, in the relevant parts, 

that issuers ‘‘whose only securities listed on Nasdaq 

are . . . debt securities . . . are exempt from the 

requirements relating to Independent Directors (as 

set forth in Rule 5605(b)), Compensation 

Committees (as set forth in Rule 5605(d)), Director 

Nominations (as set forth in Rule 5605(e)), Codes 

of Conduct (as set forth in Rule 5610), and Meetings 

of Shareholders (as set forth in Rule 5620(a)). In 

addition, these issuers are exempt from the 

requirements relating to Audit Committees (as set 

forth in Rule 5605(c)), except for the applicable 

requirements of SEC Rule 10A–3. Notwithstanding, 

Continued 

deposited only in a Federal Reserve 

Bank or in demand deposit accounts 

with institutions that meet the standards 

set out in OCC’s current risk 

management strategy (e.g., OCC’s Third 

Party Risk Management Framework) to 

minimize the risk of loss or delay in 

access to such funds. The Commission 

believes further that limiting the 

investment of cash to Government 

Securities, and specifically limiting the 

investment of Clearing Member Cash to 

instruments that provide liquidity to 

OCC by the following business day, is 

consistent with investing in assets with 

minimal credit, market and liquidity 

risks.42

The Commission believes, therefore, 

that the addition of the Cash and 

Investment Management Policy to 

OCC’s rules is consistent with Rule 

17Ad–22(e)(16) under the Exchange 

Act.43

IV. Conclusion 

It is therefore noticed, pursuant to 

Section 806(e)(1)(I) of the Clearing 

Supervision Act, that the Commission 

does not object to Advance Notice (SR– 

OCC–2021–803) and that OCC is 

authorized to implement the proposed 

change as of the date of this notice or 

the date of an order by the Commission 

approving proposed rule change SR– 

OCC–2021–014, whichever is later. 

By the Commission. 

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–03824 Filed 2–22–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94265; File No. SR– 

NASDAQ–2022–015] 

Self-Regulatory Organizations; The 

Nasdaq Stock Market LLC; Notice of 

Filing of Proposed Rule Change To 

Exempt Non-Convertible Bonds Listed 

Under Rule 5702 From Certain 

Corporate Governance Requirements 

February 16, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on February 

4, 2022, The Nasdaq Stock Market LLC 

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

Securities and Exchange Commission 

(the ‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to exempt 

non-convertible bonds listed under Rule 

5702 from certain corporate governance 

requirements. The text of the proposed 

rule change is available on the 

Exchange’s website at https://

listingcenter.nasdaq.com/rulebook/ 

nasdaq/rules, at the principal office of 

the Exchange, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

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 

In November 2018, the Commission 

approved amendments to the 

Exchange’s rules that permit the 

Exchange to list and trade nonconvertible corporate debt securities 

(referred to herein as ‘‘bonds’’ or ‘‘nonconvertible bonds’’) on the Nasdaq Bond 

Exchange.3 Under the Exchange’s listing 

rules then adopted, a non-convertible 

bond was eligible for initial listing on 

the Exchange only if it had a principal 

amount outstanding or market value of 

at least $5 million and its issuer had at 

least one class of an equity security 

listed on Nasdaq, the New York Stock 

Exchange (‘‘NYSE’’), or NYSE 

American.4 In February 2020, Nasdaq 

amended Listing Rule 5702 to allow the 

listing of non-convertible bonds issued 

by certain companies not listed on 

Nasdaq, NYSE American or NYSE (the 

‘‘2020 Filing’’).5

In 2018, Nasdaq stated its plan to seek 

exemptions to certain requirements of 

the Nasdaq Rule 5600 Series, including 

requirements relating to Review of 

Related Party Transactions (Rule 5630), 

Shareholder Approval (Rule 5635), and 

Voting Rights (Rule 5640),6 but later 

indicated that it would not pursue those 

exemptions because, at the time, the 

equity of the issuers listing nonconvertible bonds under Rule 5702 was 

required to be listed on Nasdaq, NYSE 

American or NYSE and therefore were 

subject to those Rules or substantially 

similar rules of NYSE American or the 

NYSE.7

Given the change made in the 2020 

Filing to allow the listing of nonconvertible bonds by issuers that are not 

otherwise listed on a national securities 

exchange, Nasdaq now proposes to 

exempt non-convertible bonds from the 

requirements relating to Review of 

Related Party Transactions (Rule 5630), 

Shareholder Approval (Rule 5635), and 

Voting Rights (Rule 5640).8


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if the issuer also lists its common stock or voting 

preferred stock, or their equivalent on Nasdaq it 

will be subject to all the requirements of the Nasdaq 

5600 Rule Series.’’ Nasdaq also proposes to include 

in the proposed Listing Rule 5702(d) exemptions 

from the requirements relating to Diverse Board 

Representation (as set forth in Rule 5605(f)) and 

Board Diversity Disclosure (as set forth in Rule 

5606) applicable to an issuer of a non-convertible 

bond, as provided by Listing Rules 5605(f)(4) and 

5606(c), respectively. 

9See Section 104 of the NYSE American 

Company Guide. In addition, NYSE has similar 

listing conditions, although the NYSE rule does not 

permit listing of debt securities where the issuer has 

equity securities listed on Nasdaq or NYSE 

American, is directly or indirectly owned by, or is 

under common control with, an issuer listed on 

Nasdaq or NYSE American, or where an issuer 

listed on Nasdaq or NYSE American has guaranteed 

the debt security. See Section 102.03 of the NYSE 

Listed Company Manual. 

10See Listing Rule 5615(a)(6)(A) and footnote 8 

above. 

11See S&P Global ‘‘Understanding Ratings’’ 

available at https://www.spglobal.com/ratings/en/ 

about/understanding-ratings, which identifies 

ratings of ‘‘BBB’’ or higher as investment grade, at 

least two levels higher than ‘‘B’’ ratings. 

12See, e.g., Exhibit 2, Principles of Credit Ratings, 

to S&P Global Form NRSRO, available at https://

www.standardandpoors.com/en_US/delegate/get

PDF?articleId=2193671&type=COMMENTS&

subType=REGULATORY. 

13See Approval Order at 58313. 

14See Section 104 of the NYSE American 

Company Guide; Securities Exchange Act Release 

No. 36594 (December 14, 1995), 60 FR 66330 

(December 21, 1995) (approving SR–Amex–95–29). 

See also Securities Exchange Act Release No. 37878 

(October 28, 1996), 61 FR 56726 (November 4, 1996) 

(Notice of filing and immediate effectiveness of 

proposed rule change by the Chicago Board Options 

Exchange, Inc., relating to listing and delisting 

standards for debt securities). 

Nasdaq believes that it is appropriate 

to exempt non-convertible bonds 

satisfying the requirements of Listing 

Rule 5702, which are the same as the 

requirements for listing debt on NYSE 

American,9 from the requirements 

relating to Review of Related Party 

Transactions (Rule 5630), Shareholder 

Approval (Rule 5635), and Voting Rights 

(Rule 5640). Nasdaq believes that listing 

requirements for non-convertible bonds 

are designed so that only companies 

capable of meeting their financial 

obligations are eligible to have their 

non-convertible bonds listed on Nasdaq. 

To issue a bond, the issuer hires a thirdparty trustee, typically a bank or trust 

company, to represent buyers of the 

bond. The agreement entered into by the 

issuer and the trustee is referred to as 

the trust indenture, which is a binding 

contract that is created to protect the 

interests of bondholders. Accordingly, 

holders of non-convertible bonds do not 

expect to have governance rights the 

way that equity investors may. The 

issuance of equity and assignment of 

voting rights does not affect these 

creditors because their interests are 

protected contractually, as indicated 

above. Accordingly, bondholders are 

focused on the ability of the issuer to 

meet their financial obligations and the 

listing rules already have standards in 

that regard. For this reason, nonconvertible bonds are already exempt 

from many of the governance 

requirements.10

Nasdaq believes that it does not need 

to impose the requirements of the Rules 

in connection with listing of nonconvertible bonds on issuers that have 

a class of equity listed on Nasdaq, NYSE 

or NYSE American because these 

issuers either have equity securities 

listed on Nasdaq, which makes them 

subject to the requirements of the Rules, 

or NYSE or NYSE American, which 

makes them subject to substantially 

similar requirements of such exchanges. 

In cases where listed issuers raise debt 

through entities they directly or 

indirectly own a majority interest in, or 

entities with which they are under 

common control, Nasdaq believes it is 

appropriate to exempt these issuers 

from the requirements of the Rules and 

rely on the company’s listing on 

Nasdaq, NYSE American or NYSE as 

evidence that the issuer of the nonconvertible bond is capable of meeting 

its financial obligations because the 

issuer is a subsidiary or affiliate of the 

listed company. 

Similarly, in other cases, where the 

issuer of the non-convertible bond is not 

a subsidiary or affiliate of a listed 

company, a listed company may 

nonetheless guarantee the debt and in 

these cases the guarantee by the listed 

company serves to ensure that if the 

company cannot, then its guarantor is 

capable of meeting the financial 

obligations of the non-convertible bond, 

particularly, because that debt is a 

senior security to the listed equity. 

Nasdaq also believes that there are 

other indications that the issuer of a 

non-convertible bond is capable of 

meeting its financial obligations, besides 

the ties to a listed company described 

above. Specifically, in the case of these 

un-affiliated issuers, Nasdaq believes 

that it is appropriate to exempt from the 

requirements of the Rules issuers of 

listed bonds with a current rating from 

an NRSRO that is no lower than an S&P 

Corporation ‘‘B’’ rating or equivalent 

rating by another NRSRO because this is 

another third-party evaluation of the 

issuers ability to make interest 

payments and repay the loan upon 

maturity. Similarly, if a more junior 

issue of the same company, or an issue 

of the same company at the same 

priority in liquidation (a ‘‘pari passu 

issue’’) has a rating no lower than an 

S&P Corporation ‘‘B’’ rating or an 

equivalent rating by another NRSRO, 

than it is appropriate to presume that 

the company will also be capable of 

meeting its obligations on the nonconvertible bonds to be exempt from the 

requirements of the Rules because those 

bonds would be repaid in the same 

priority (if a pari passu issue) or sooner 

(if the other issue is more junior) as the 

‘‘B’’ rated issue. Finally, if no NRSRO 

has assigned a rating to the issue to be 

listed, Nasdaq believes it is appropriate 

to consider the rating assigned to the 

next most senior issue of the same 

company. If that rating is an investment 

grade rating, which is higher than the 

‘‘B’’ rating standard just described, then 

that also provides assurance that the 

company will be capable of meeting its 

financial obligations on the nonconvertible bond.11 In assigning ratings, 

an NRSRO considers the ability of the 

issuer to make timely payments of 

interest and ultimate payment of 

principal to the related securities.12

Nasdaq notes that it performs realtime surveillance of the bonds for the 

purpose of maintaining a fair and 

orderly market at all times.13 An issuer 

listing non-convertible bonds will 

continue to be subject to the existing 

continued listing requirement of Listing 

Rule 5702(b)(2) that it must be able to 

meet its obligations on the listed nonconvertible bonds. These issuers are 

also subject to the requirement in 

Listing Rule 5702(c) to make prompt 

public disclosure of material 

information that would reasonably be 

expected to affect the value of its listed 

bonds or influence investors’ decisions 

regarding such bonds, which will allow 

Nasdaq to timely review for events that 

may cause the issuer to be unable to 

meet its obligations on the listed nonconvertible bonds. Thus, for example, 

an issuer would have to disclose if a 

non-convertible bond that was 

previously guaranteed is no longer 

guaranteed, or if the issuer or guarantor 

declares bankruptcy. An issuer would 

also have to disclose if its common 

stock is delisted, and Nasdaq would 

consider whether it is appropriate to 

continue the listing of the nonconvertible bond of an issuer that was 

majority-owned, under common control, 

or guaranteed by a listed company, 

which has since been delisted. Nasdaq 

also would consider any changes in the 

rating assigned to the bond or other 

issues of the same company that were 

used to qualify the listed bond. 

Finally, Nasdaq notes that in 

approving the bond listing standards of 

other exchanges,14 the Commission 

considered the delisting criteria for the 

bonds and noted that it would have 

serious concerns about any proposal 


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15The Commission defined an unaffiliated issuer 

as an issuer that has no equity securities listed on 

the [NYSE American] or NYSE; is not, directly or 

indirectly, majority-owned by, nor under common 

control with, an issuer of [NYSE American] or 

NYSE-listed equity securities; and is not issuing a 

debt security guaranteed by an issuer of equity 

securities listed on the [NYSE American] or NYSE. 

16See footnote 14 above. 

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

18 15 U.S.C. 78f(b)(5). 

19See Section 104 of the NYSE American 

Company Guide, Nasdaq Listing Rule 5515(b)(4) 

and Section 102.03 of the NYSE Listed Company 

Manual. 

that does not provide for the delisting of 

convertible bonds where a company acts 

to disadvantage its shareholders. That 

concern was addressed by including in 

a requirement that the NYSE American 

would delist convertible bonds when 

the issuer’s equity security is delisted 

due to a violation of the that exchange’s 

corporate governance listing standards. 

However, in circumstances where the 

exchange lacked an equity listing 

relationship with the debt issuer the 

Commission concluded that: 

the revised standards should enable [NYSE 

American] to identify listed companies that 

may have insufficient resources to meet their 

financial obligations or whose debt securities 

may lack adequate trading depth and 

liquidity. This, in turn, will allow [NYSE 

American] to take appropriate action to 

protect bondholders. 

In terms of the delisting criteria, the 

Commission discussed the lack a 

minimum market value for debt 

securities, elimination of the 

distribution requirement for 

‘‘unaffiliated’’ 15 issuers and set forth its 

expectation for the exchange to consider 

carefully the propriety of continued 

exchange trading of the securities of 

bankrupt or distressed companies, and 

indicated that it expected debt securities 

with minimal value to be delisted. 

However, the Commission did not 

discuss or set forth any expectations 

that an unaffiliated bond issuer should 

be subject to any corporate governance 

requirements applicable to an issuer of 

an equity security. Nasdaq believes this 

approach is consistent with the 

creditors’ reliance on contractual 

protections of their interests rather than 

on governance rights, as described 

above. Accordingly, Nasdaq believes 

that it is appropriate to exempt nonconvertible bonds satisfying the 

requirements of Listing Rule 5702 from 

the requirements of the Rules and that 

this approach is consistent with the 

delisting requirements of other 

exchanges.16

2. Statutory Basis 

The Exchange believes that its 

proposal is consistent with Section 6(b) 

of the Act,17 in general, and furthers the 

objectives of Section 6(b)(5) of the Act,18

in particular, in that it is designed to 

promote just and equitable principles of 

trade, to remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general to protect 

investors and the public interest. 

Listing Rule 5702 allows the listing of 

non-convertible bonds issued by 

companies capable of meeting their 

financial obligations on those bonds. 

Nasdaq believes that the proposed rule 

change is designed to protect investors 

and the public interest because issuers 

that have equity securities listed on 

Nasdaq, are already subject to the 

requirements of the Rules, or such 

issuers are subject to the rules of NYSE 

or NYSE American, that impose 

substantially similar requirements. 

Nasdaq also believes that exempting 

unaffiliated bond issuers is designed to 

remove impediments to and perfect the 

mechanism of a free and open market 

because issuers of such bonds are 

capable of meeting their financial 

obligations on those bonds and because 

Nasdaq lacks an equity listing 

relationship with the debt issuer or such 

relationship is attenuated. The existing 

alternative conditions for issuers that do 

not have equity securities listed on 

Nasdaq, NYSE American or NYSE are 

designed to protect investors and the 

public interest by ensuring that the 

bond is issued or guaranteed by an 

entity listed on Nasdaq, NYSE American 

or NYSE; is issued by an entity under 

direct, indirect or common control with 

an issuer listed on Nasdaq, NYSE 

American or NYSE; that the issue to be 

listed (or an issue that is at the same 

priority or junior to the issue to be 

listed) is assigned a minimum ‘‘B’’ 

rating or its equivalent by an NRSRO; or 

that the next most senior issue to the 

issue to be listed is assigned an 

investment grade rating. These 

conditions are appropriate indicia that 

the issuer, or a guarantor, can meet its 

obligations on the debt. Moreover, this 

approach is consistent with approach of 

NYSE American and other exchanges 

for listing debt.19 As discussed above, 

Nasdaq believes that the Commission 

has previously considered this approach 

and approved listing standards that 

assure that an issuer is capable of 

meeting its financial obligations. 

Finally, Nasdaq notes that it surveils for 

changes to the conditions of listed 

bonds that may implicate the ability of 

the issuer to meet its obligations on the 

listed non-convertible bonds. 

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. Rather, the 

proposed rule change will enhance 

competition among exchanges by 

conforming Nasdaq’s listing standards 

for non-convertible bonds to those of 

other exchanges, as described in details 

above. In addition, the proposed rule 

change may enhance competition 

among issuers by allowing more issuers 

to list their non-convertible bonds on 

Nasdaq, provided they meet the 

requirements of the rule. 

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 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period 

up to 90 days (i) as the Commission may 

designate if it finds such longer period 

to be appropriate and publishes its 

reasons for so finding or (ii) as to which 

the self-regulatory organization 

consents, the Commission will: 

(A) By order approve or disapprove 

the proposed rule change, or 

(B) institute proceedings to determine 

whether the proposed rule change 

should be 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– 

NASDAQ–2022–015 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–NASDAQ–2022–015. This 

file number should be included on the 


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20 17 CFR 200.30–3(a)(12). 

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). 

5See NYSE Arca, Inc. (‘‘NYSEArca’’) Fee 

Schedule (assessing Market Makers $6,000 for up to 

175 option issues, an additional $5,000 for up to 

350 option issues, an additional $4,000 for up to 

1,000 option issues, and an additional $3,000 for all 

option issues traded on the Exchange). The 

Exchange notes that these fees are compounded, so 

Market Makers who trade in all option issues on the 

exchange are assessed $18,000 per month. See also 

Miami International Securities Exchange, LLC 

(‘‘MIAX’’) Fee Schedule (assessing Market Makers 

$7,000 for up to 10 classes or up to 20% of classes 

by volume, $12,000 for up to 40 classes or up to 

35% of classes by volume, $17,000 for up to 100 

classes or up to 50% or classes by volume, and 

$22,000 for over 100 classes or over 50% of classes 

by volume up to all classes listed on MIAX). 

6The Exchange notes the following Participant 

types on BOX: Public Customers, Professional 

Customers, Broker Dealers, and Market Makers. 

Pursuant to this proposal, Public Customers, 

Professional Customers, and Broker Dealers will 

continue to be charged the $1,500 Participant Fee 

detailed in Section VIII.B of the BOX Fee Schedule. 

7BOX notes that the structure of BOX is different 

from other options exchanges in the industry. 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of the 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2022–015, and 

should be submitted on or before March 

16, 2022. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2022–03760 Filed 2–22–22; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–94264; File No. SR–BOX– 

2022–07] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing and 

Immediate Effectiveness of a Proposed 

Rule Change To Amend the Fee 

Schedule on the BOX Options Market 

LLC Facility To Adopt Electronic 

Market Maker Trading Permit Fees 

February 16, 2022. 

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

Securities Exchange Act of 1934 

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

notice is hereby given that on February 

1, 2022, BOX Exchange LLC 

(‘‘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 to 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 http://

boxexchange.com. 

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 establish a new 

monthly Participant Fee. Specifically, 

the Exchange proposes to adopt 

electronic Market Maker Trading Permit 

Fees as follows: (i) $4,000 per month for 

Market Maker Appointments in up to 

and including 10 classes; (ii) $6,000 per 

month for Market Maker Appointments 

in up to and including 40 classes; (iii) 

$8,000 per month for Market Maker 

Appointments in up to and including 

100 classes; and (iv) $10,000 per month 

for Market Maker Appointments for over 

100 classes. For the calculation of the 

monthly electronic Market Maker 

Trading Permit fees, the number of 

classes is defined as the greatest number 

of classes the Market Maker was 

appointed to quote in on any given day 

within the calendar month. The 

Exchange notes that the proposed 

electronic Market Maker Trading Permit 

fees are lower than fees assessed at 

competing options exchanges.5 The 

Exchange notes the current monthly 

Participant Fee of $1,500 per month will 

not apply to electronic Market Makers. 

Under this proposal, electronic Market 

Makers will pay the applicable monthly 

electronic Market Maker Trading Permit 

fee only. All other electronic 

Participants 6 will continue to pay the 

monthly Participant Fee in Section 

VIII.B of the BOX Fee Schedule. 

The Exchange believes that it is 

important to demonstrate that these fees 

are based on its costs and reasonable 

business needs that have grown 

substantially since the Exchange 

implemented the Participant Fee for all 

BOX Participants in 2016. The Exchange 

also believes the proposed electronic 

Market Maker Trading Permit Fees will 

allow BOX to offset expenses that BOX 

has and will incur, and that BOX is 

providing sufficient transparency (as 

described below) into how BOX 

determined to charge such fees. 

Accordingly, BOX is providing an 

analysis of its revenues, costs, and 

profitability associated with the 

proposed electronic Market Maker 

Trading Permit Fees. This analysis 

includes information regarding its 

methodology for determining the costs 

and revenues associated with providing 

access services to electronic Market 

Makers.7


khammond on DSKJM1Z7X2PROD with NOTICES