51410 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 

10 Id. 

11 15 U.S.C. 78s(b)(3)(A). 12 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. 

13 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

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) 10 requirement that 

the rules of an exchange not be designed 

to permit unfair discrimination between 

customers, issuers, brokers, or dealers. 

In particular, the Exchange believes 

that the proposed rule changes 

regarding the manner in which the 

System treats non-Priority Customer 

with orders and quotes at the same price 

for the purposes of the participation 

entitlement and applies the PMM 

participation entitlement percentages 

removes impediments to and perfects 

the mechanism of a free and open 

market and national market system by 

amending Rule 5.32(a)(2)(B) to be 

consistent with current functionality. 

The proposed changes are merely a 

clarification and a correction to 

inadvertently changed rule text in the 

Rule intended to more accurately reflect 

how the System currently works, 

thereby increasing transparency in the 

Rule and ultimately benefitting 

investors. The proposed clarification 

and correction do not alter any current 

functionality nor the current 

participation entitlement percentage 

structures, which are consistent with 

pre-migration provisions as previously 

filed with the Commission, but instead 

provide clarity to the Rule by more 

accurately describing the current 

participation entitlement process. 

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 

proposed rule changes to Rule 

5.32(a)(2)(B) are not competitive in 

nature but are merely a clarification and 

correction in the Rule, consistent with 

existing System functionality and 

intended to provide clarity to the Rule 

by more accurately reflecting the current 

participation entitlement process. 

DPMs, LMMs and PMMs will continue 

to receive participation entitlements in 

the same manner as they do today. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange neither solicited nor 

received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (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 11 and Rule 19b– 

4(f)(6) thereunder.12 At any time within 

60 days of the filing of the proposed rule 

change, the Commission summarily may 

temporarily suspend such rule change if 

it appears to the Commission that such 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or otherwise in furtherance of 

the purposes of the Act. If the 

Commission takes such action, the 

Commission will institute proceedings 

to determine whether the proposed rule 

change 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– 

CBOE–2021–052 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–CBOE–2021–052. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 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–CBOE–2021–052, and 

should be submitted on or before 

October 6, 2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.13

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–19858 Filed 9–14–21; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–92926; File No. SR–BOX– 

2021–19] 

Self-Regulatory Organizations; BOX 

Exchange LLC; Notice of Filing of 

Proposed Rule Change Related to BOX 

Exchange LLC and BOX Holdings 

Group LLC Ownership Transfer 

Transactions 

September 9, 2021. 

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 August 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 51411 

3A ‘‘Member’’ of the Exchange means the current 

owners of Economic Units and Voting Units of the 

Exchange and will include any person subsequently 

admitted to the Exchange as an additional or 

substitute Member of the Exchange. See Exchange 

LLC Agreement § 1.1. 

4A ‘‘Member’’ of BOX Holdings means the 

current owners of Units of BOX Holdings and will 

include any Person subsequently admitted to BOX 

Holdings as an additional or substitute Member of 

BOX Holdings. See Holdings LLC Agreement § 1.1. 

Current Members of BOX Holdings are: MXUS2, IB 

Exchange Corp., Citadel Securities Principal 

Investments LLC; Citigroup Financial Products Inc., 

UBS Americas Inc., CSFB Next Fund Inc., JPMC 

Strategic Investments I Corporation, Wolverine and 

Aragon Solutions Ltd. 

5 ‘‘Economic Units’’ of the Exchange means equal 

units of limited liability company interest in the 

Exchange collectively comprising all interests in the 

profits and losses of the Exchange and all rights to 

receive distributions from the Exchange as set forth 

in the Exchange LLC Agreement. See Exchange LLC 

Agreement § 2.5(a). 

6 ‘‘Voting Units’’ of the Exchange means equal 

units of limited liability company interest in the 

Exchange collectively comprising all voting 

interests of Members with respect to Exchange 

matters. See Exchange LLC Agreement § 2.5(b). 

7 ‘‘Class A Units’’ of BOX Holdings means equal 

units of limited liability company interest in BOX 

Holdings, including an interest in the ownership 

and profits and losses of BOX Holdings and the 

right to receive distributions from BOX Holdings. 

See Holdings LLC Agreement § 1.1. 

8 ‘‘Class B Units’’ of BOX Holdings are identical 

to Class A Units except Class B Units include 

conversion rights, a liquidation preference and class 

voting rights with respect to those matters. See 

Holdings LLC Agreement §§ 1.1 and 2.5. 

9 ‘‘Exchange Facility Participant’’ means a firm or 

organization that is registered with the Exchange 

pursuant to the Exchange Rules for purposes of 

participating in trading on any Exchange Facility. 

See Exchange LLC Agreement § 1.1. 

27, 2021, BOX Exchange LLC (the 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (the 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The 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 update its 

ownership schedule and accomplish the 

following ownership transfer 

transactions, resulting in changes to the 

ownership of the Exchange and BOX 

Holdings Group LLC, an affiliate of the 

Exchange (‘‘BOX Holdings’’): (i) The 

Exchange proposes to repurchase the 

ownership interests in the Exchange 

held by Citigroup Financial Products 

Inc. (‘‘Citi’’) and CSFB Next Fund Inc. 

(‘‘CSFB’’); (ii) BOX Holdings proposes to 

repurchase the ownership interests in 

BOX Holdings held by Citi and CSFB; 

and (iii) Wolverine Holdings, L.P. 

(‘‘Wolverine’’) proposes to purchase an 

ownership interest in the Exchange from 

MX US 2, Inc., a wholly-owned 

subsidiary of TMX Group Limited 

(‘‘MXUS2’’). 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://boxoptions.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 

self-regulatory organization included 

statements concerning the purpose of, 

and basis for, the proposed rule change 

and discussed any comments it received 

on the proposed rule change. The text 

of these statements may be examined at 

the places specified in Item IV below. 

The self-regulatory organization has 

prepared summaries, set forth in 

Sections A, B, and C below, of the most 

significant aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange is a limited liability 

company, organized under the laws of 

the State of Delaware on August 26, 

2010. The Exchange’s charter is a 

Second Amended and Restated Limited 

Liability Company Agreement, dated as 

of May 29, 2020, as amended November 

30, 2020 (the ‘‘Exchange LLC 

Agreement’’). Each of Citi, CSFB and 

MXUS2 became a Member 3 of the 

Exchange on May 10, 2012. Wolverine 

is not currently a Member of the 

Exchange. 

BOX Holdings is a limited liability 

company, organized under the laws of 

the State of Delaware on August 26, 

2010. BOX Holdings is the sole owner 

of BOX Options Market LLC, a facility 

of the Exchange (‘‘BOX Options’’). The 

BOX Holdings charter is a Second 

Amended and Restated Limited 

Liability Company Agreement, dated as 

of September 13, 2018 (the ‘‘Holdings 

LLC Agreement’’). Each of Citi and 

CSFB became a Member 4 of BOX 

Holdings on May 10, 2012. 

6,445 Economic Units 5 and 8,388 

Voting Units 6 represent Citi’s interest in 

the Exchange, comprising 7.683% of all 

outstanding Economic Units and 

9.999% of all outstanding Voting Units 

of the Exchange, respectively (the ‘‘Citi 

Exchange Units’’). 1,155 Class A Units 7

and 25 Class B Units 8 represent Citi’s 

interest in BOX Holdings, comprising 

7.853% of all outstanding Class A Units 

and Class B Units (collectively, ‘‘Units’’) 

of BOX Holdings (the ‘‘Citi Holdings 

Units’’ and, together with the Citi 

Exchange Units, the ‘‘Citi Units’’). Citi’s 

voting power with respect to votes of 

Members of BOX Holdings is 8.13% and 

Citi’s voting power on the Board of 

Directors of BOX Holdings is 8.38%. 

6,123 Economic Units and 8,388 

Voting Units represent CSFB’s interest 

in the Exchange, comprising 7.299% of 

all outstanding Economic Units and 

9.999% of all outstanding Voting Units 

of the Exchange, respectively (the 

‘‘CSFB Exchange Units’’). 475 Class A 

Units represent CSFB’s interest in BOX 

Holdings, comprising 3.161% of all 

outstanding Units of BOX Holdings (the 

‘‘CSFB Holdings Units’’ and, together 

with the CSFB Exchange Units, the 

‘‘CSFB Units’’). CSFB’s voting power 

with respect to votes of Members of 

BOX Holdings is 3.27% and CSFB’s 

voting power on the Board of Directors 

of BOX Holdings is 3.37%. 

33,554 Economic Units and 16,777 

Voting Units represent MXUS2’s 

interest in the Exchange, comprising 

40% of all outstanding Economic Units 

and 20% of all outstanding Voting Units 

of the Exchange, respectively. 

Wolverine currently does not hold any 

interest in the Exchange. 

The Exchange has agreed with Citi to 

purchase the Citi Exchange Units. BOX 

Holdings has agreed with Citi to 

purchase the Citi Holdings Units. 

Accordingly, it is proposed that Citi 

transfer all of the Citi Exchange Units to 

the Exchange and all of the Citi 

Holdings Units to BOX Holdings (the 

‘‘Citi Transfer’’). 

The Exchange has agreed with CSFB 

to purchase the CSFB Exchange Units. 

BOX Holdings has agreed with CSFB to 

purchase the CSFB Holdings Units. 

Accordingly, it is proposed that CSFB 

transfer all of the CSFB Exchange Units 

to the Exchange and all of the CSFB 

Holdings Units to BOX Holdings (the 

‘‘CSFB Transfer’’). 

Wolverine has agreed with MXUS2 to 

purchase one (1) Economic Unit in the 

Exchange from MXUS2. Accordingly, it 

is proposed that MXUS2 transfer one (1) 

Economic Unit to Wolverine (the 

‘‘Wolverine Transfer’’ and, together with 

the Citi Transfer and the CSFB Transfer, 

the ‘‘Transfers’’). Wolverine is an 

existing Exchange Facility Participant.9

At the time of the Wolverine Transfer, 

Wolverine will become a Member of the 

Exchange. As a holder of one (1) 

Economic Unit in the Exchange, 

Wolverine will also be allocated 2,637 

Voting Units as provided in the 


khammond on DSKJM1Z7X2PROD with NOTICES
51412 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 

10As discussed below, § 7.3(g) of the Exchange 

LLC Agreement provides that a Member of the 

Exchange may hold a different number of Voting 

Units than Economic Units due to the application 

of Voting Ownership Limits to other Members. 

11To be eligible for such approval, the proposed 

transferee must (x) be of high professional and 

financial standing, (y) be able to carry out its duties 

as a Member hereunder, if admitted as such, and 

(z) be under no regulatory or governmental bar or 

disqualification. See Exchange LLC Agreement 

§ 7.1(a). 

12 ‘‘Voting Percentage Interest’’ with respect to a 

Member means the ratio of the number of Voting 

Units held by the Member, directly or indirectly, of 

record or beneficially, to the total of all of the 

issued and outstanding Voting Units held by 

Members, expressed as a percentage. Voting Units 

held by a Member that are ineligible to vote shall 

not be counted in the numerator or the denominator 

when determining such ratio. See Exchange LLC 

Agreement § 1.1. 

13See Exchange LLC Agreement § 7.1(c). 

14 ‘‘Economic Percentage Interest’’ with respect to 

a Member means the ratio of the number of 

Economic Units held by the Member, directly or 

indirectly, of record or beneficially, to the total of 

all of the issued and outstanding Economic Units 

held by Members, expressed as a percentage. See 

Exchange LLC Agreement § 1.1. 

15Any Member may voluntarily set a lower 

Voting Ownership Limit for itself at its own 

discretion. See Exchange LLC Agreement § 7.3(g)(i). 

16Any Economic Units held by a Member in 

excess of its Economic Ownership Limit are 

cancelled because the existence of such Units is not 

permitted by the Exchange LLC Agreement. The 

number and allocation of Voting Units 

automatically adjust upon any change in ownership 

of Economic Units pursuant to Exchange LLC 

Agreement § 7.3(g)(iii). 

17 ‘‘Participant Director’’ means a Director of the 

Exchange who is an officer, director or employee of 

an Exchange Facility Participant. See BOX 

Exchange LLC Bylaws § 1.01. 

18 ‘‘Non-industry Director’’ means a Director of 

the Exchange who (i) has no material business 

relationship with the Exchange or any Affiliate of 

the Exchange, or any Exchange Facility Participant 

or any Affiliate of any Exchange Facility Participant 

and is not associated with any broker or dealer as 

required pursuant to Section 6(b)(3) of the 

Securities Exchange Act of 1934, as amended or (ii) 

is not an Industry Representative. ‘‘Industry 

Representative’’ means an individual who is an 

officer, director or employee of a broker or dealer 

or who has been employed in any such capacity at 

any time within the prior three (3) years, as well 

as an individual who has, or has had, a consulting 

or employment relationship with the Exchange, or 

any Affiliate of the Exchange, at any time within the 

prior three (3) years. See BOX Exchange LLC 

Bylaws § 1.01. 

19See BOX Exchange LLC Bylaws § 4.02. 

20 ‘‘Percentage Interest’’ with respect to a Member 

of BOX Holdings means the ratio of the number of 

Units held by the Member to the total of all of the 

issued Units, expressed as a percentage and 

determined with respect to each class of Units, 

whenever applicable. See Holdings LLC Agreement 

§ 1.1. 

Exchange LLC Agreement,10 comprising 

0.002% of all outstanding Economic 

Units and 5.026% of all outstanding 

Voting Units of the Exchange, 

respectively. 

Pursuant to the Exchange LLC 

Agreement, Wolverine will not become 

a Member of the Exchange unless 

Wolverine is first accepted and 

approved as a transferee 11 and admitted 

as a Member by the affirmative vote of 

Members holding a majority of the 

Voting Percentage Interest,12 Wolverine 

executes a counterpart of the Exchange 

LLC Agreement and agrees in writing to 

assume the obligations of a Member 

under the Exchange LLC Agreement, 

and the Board determines the Wolverine 

Transfer is permitted by the Exchange 

LLC Agreement.13 Attached [sic] as 

Exhibit 5A is a form of Instrument of 

Accession to be executed by Wolverine 

prior to closing of the Wolverine 

Transfer to comply with the foregoing 

requirements. 

After the Citi Transfer, the Citi Units 

will no longer be outstanding and Citi 

will have no remaining rights under the 

Exchange LLC Agreement or the 

Holdings LLC Agreement. After the 

CSFB Transfer, the CSFB Units will no 

longer be outstanding and CSFB will 

have no remaining rights under the 

Exchange LLC Agreement or the 

Holdings LLC Agreement. In connection 

with the Transfers, the Exchange 

proposes to amend Schedule A to the 

Exchange LLC Agreement, in the form of 

Exhibit 5B to this filing, to reflect the 

changes in Exchange ownership. No 

amendment of the Holdings LLC 

Agreement is proposed. 

As provided in Section 7.3(f) of the 

Exchange LLC Agreement, ‘‘no Person, 

alone or together with any Related 

Persons, shall own, directly or 

indirectly, of record or beneficially, an 

aggregate Economic Percentage 

Interest 14 greater than 40% (or 20% if 

such Person is an Exchange Facility 

Participant) (the ‘‘Economic Ownership 

Limit’’) . . . .’’ Accordingly, because 

the total number of outstanding 

Economic Units of the Exchange are 

reduced in the Transfers, outstanding 

Economic Units held by any remaining 

Members of the Exchange will be 

cancelled to the extent necessary to 

ensure compliance with the Economic 

Ownership Limit. 

As provided in Section 7.3(g) of the 

Exchange LLC Agreement, ‘‘no Person, 

alone or together with any Related 

Persons, shall own, directly or 

indirectly, of record or beneficially, an 

aggregate Voting Percentage Interest of 

greater than 20% (the ‘‘Voting 

Ownership Limit’’) . . . .’’ 15 Further, 

Section 7.3(g) of the Exchange LLC 

Agreement provides that, upon any 

change in economic ownership, the 

number of Voting Units held by each 

Member of the Exchange shall 

automatically adjust to maintain 

compliance with the Voting Ownership 

Limit. Accordingly, because the number 

of Economic Units held by Members of 

the Exchange are reduced by the 

Transfers, the number of outstanding 

Voting Units of the Exchange will be 

reduced accordingly and the number of 

Voting Units held by each of the 

remaining Members of the Exchange, 

including Wolverine, will be adjusted to 

the extent necessary to ensure 

compliance with the Voting Ownership 

Limit. 

As discussed above, all ownership 

limits relating to the Exchange will 

continue to be strictly respected. The 

Transfer will not result in any Member 

of the Exchange exceeding its applicable 

Economic Ownership Limit or Voting 

Ownership Limit (collectively, its 

‘‘Ownership Limits’’). Prior to the 

Transfers, some Members of the 

Exchange already held the maximum 

ownership percentages allowed under 

the Exchange LLC Agreement. The 

ownership percentages held by these 

Members will remain below the 

applicable Ownership Limits after 

giving effect to the Transfers. For other 

Members of the Exchange, adjustments 

to ownership percentages resulting from 

the Transfer will be made to comply 

with all Ownership Limits.16 After 

giving effect to the Transfers, no 

Member will hold more than 40% 

Economic Percentage Interest, no 

Exchange Facility Participant will hold 

more than 20% Economic Percentage 

Interest, and no Member will hold more 

than 20% Voting Percentage Interest in 

the Exchange. Upon the closing of the 

Transfers, each of MXUS2 and IB 

Exchange Corp. (‘‘IB’’) would hold the 

maximum number of Economic Units 

permitted under its applicable 

Economic Ownership Limit and each 

Member of the Exchange except 

Wolverine would hold the maximum 

number of Voting Units permitted under 

its applicable Voting Ownership Limit. 

The composition of the Board of 

Directors of the Exchange will remain 

unaffected by the Transfer. The makeup 

of the Board will still be comprised of 

at least 20% of Directors who are 

Participant Directors,17 a majority of 

Directors who are Non-industry 

Directors,18 and one (1) Director who is 

also an officer or director of BOX 

Holdings, if BOX Holdings chooses to 

exercise its right to appoint such a 

director.19

Section 7.4(e) of the Holdings LLC 

Agreement provides that BOX Holdings 

shall provide the SEC with written 

notice ten (10) days prior to the closing 

date of any acquisition that results in a 

Member’s Percentage Interest 20 meeting 

or crossing the threshold level of 5% or 


khammond on DSKJM1Z7X2PROD with NOTICES
Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 51413 

21See Holdings LLC Agreement § 4.1(a)(i). 

22See Holdings LLC Agreement § 4.1(a)(iii). 

23See Holdings LLC Agreement § 7.4(h). 24See Holdings LLC Agreement § 4.1(a)(iv). 

25See Securities Exchange Act Release No. 34– 

66871 (April 27, 2012) 77 FR 26323 (May 3, 2012) 

(Order granting approval of BOX Exchange). 

26 15 U.S.C. 78f(b). 

27 15 U.S.C. 78f(b)(5). 

the successive levels of 10% and 15%. 

Although Citadel Securities Principal 

Investments LLC (‘‘Citadel’’) is not 

acquiring any additional Units of BOX 

Holdings in the Transfers, the reduction 

of the total number of outstanding Units 

of BOX Holdings in connection with the 

Transfers will result in a corresponding 

increase in the Percentage Interest held 

by Citadel from 13.80% to 15.50% and 

thereby crossing the 15% level. 

The change in Citadel’s Percentage 

Interest resulting from the Transfers will 

also increase the voting power of Citadel 

in BOX Holdings. After giving effect to 

the Transfers, Citadel’s voting power 

with respect to votes of Members of 

BOX Holdings will increase from 

14.28% to 16.65% and Citadel’s total 

voting power on the Board of Directors 

of BOX Holdings will increase from 

14.73% to 16.65%. Citadel currently has 

the power to appoint one (1) 

representative to the BOX Holdings 

Board of Directors 21 and, after giving 

effect to the Transfers, Citadel will have 

the power to appoint two (2) Directors 

of BOX Holdings.22

Section 7.4(f) of the Holdings LLC 

Agreement provides that a rule filing 

pursuant to Section 19 of the Exchange 

Act is required with respect to certain 

transactions that result in the 

acquisition and holding by a person of 

an aggregate Percentage Interest in BOX 

Holdings which meets or crosses the 

threshold level of 20% or any 

successive 5% level. Although MXUS2 

is not acquiring any additional Units of 

BOX Holdings in connection with the 

Transfers, the reduction of the total 

number of outstanding Units of BOX 

Holdings in connection with the 

Transfers will result in a corresponding 

increase in the Percentage Interest held 

by MXUS2 from 42.62% to 47.89% and 

thereby crossing the 45% level. 

Although IB is not acquiring any 

additional Units of BOX Holdings in 

connection with the Transfers, the 

reduction of the total number of 

outstanding Units of BOX Holdings in 

connection with the Transfers will 

result in a corresponding increase in the 

Percentage Interest held by IB from 

22.69% to 25.50% and thereby crossing 

the 25% level. 

The change in IB’s ownership 

percentage of Holdings resulting from 

the Transfers will not affect IB’s voting 

percentage because, as an Exchange 

Facility Participant on BOX Options, 

IB’s allowable voting percentage is 

limited to 20%, as provided by the 

Holdings LLC Agreement 23 and will 

remain at 19.999%. As a result of this 

limitation of IB’s voting percentage, the 

changes resulting from the Transfers 

will also increase the voting power of 

MXUS2 in BOX Holdings as IB’s voting 

power above 19.999% will be 

reallocated among other Members of 

BOX Holdings. After giving effect to the 

Transfers, MXUS2’s voting power with 

respect to votes of Members of BOX 

Holdings will increase from 44.10% to 

51.43% and MXUS2’s total voting 

power on the Board of Directors of BOX 

Holdings will increase from 45.50% to 

51.43%, providing MXUS2 the ability to 

control votes of the Board of Directors 

of BOX Holdings that require a simple 

majority vote. MXUS2 currently has the 

power to appoint three (3) 

representatives to the BOX Holdings 

Board of Directors 24 and, after giving 

effect to the Transfers, MXUS2 will still 

have the power to appoint the same 

number of Directors of BOX Holdings. 

No other Member of BOX Holdings 

will have its ownership percentage in 

BOX Holdings adjusted by more than 

1% of the total BOX Holdings 

ownership as a result of the Transfers. 

Section 7.3(e) of the Exchange LLC 

Agreement provides that the Exchange 

shall provide the SEC with written 

notice ten (10) days prior to the closing 

date of any acquisition that would result 

in a Member having a Voting Percentage 

Interest of five percent (5%) or more. 

Although Wolverine proposes to acquire 

only one (1) Exchange Economic Unit of 

the Exchange, the allocation of 

Exchange Voting Units resulting from 

the Transfers would result in Wolverine 

holding 2,637 Exchange Voting Units, 

representing a 5.03% Voting Percentage 

Interest and thereby crossing the 5% 

level. 

As discussed above, all Exchange 

owners are subject to a Voting 

Ownership Limit of 20%. Although 

Aragon Solutions Ltd. (‘‘Aragon’’) is not 

acquiring any additional Economic 

Units of the Exchange in the Transfers, 

the reallocation of Exchange Voting 

Units resulting from the Transfers 

would result in Aragon holding 10,493 

Exchange Voting Units, representing 

19.999% Voting Percentage Interest, 

compared with 6.294% prior to the 

Transfers. 

No other Member of the Exchange 

will have its Economic Percentage 

Interest or its Voting Percentage Interest 

in the Exchange adjusted by more than 

5% of the total BOX Holdings 

ownership as a result of the Transfers. 

The consideration paid to Citi and 

CSFB by the Exchange will not 

materially affect the Exchange’s 

capitalization. After payment by the 

Exchange of the purchase price to each 

of Citi and CSFB, the Exchange will 

continue to reserve sufficient assets to 

operate and fulfill its regulatory 

responsibilities with respect to itself 

and BOX Options. The Exchange Board 

of Directors remains committed to 

ensuring the Exchange is sufficiently 

capitalized to meet its obligations. The 

Exchange and BOX Options continue to 

be subject to a written Facility 

Agreement, which provides that the 

Exchange receives and retains all assets 

deemed to be necessary for regulatory 

purposes by the Exchange.25

Accordingly, payments made to 

consummate the Transfers will not have 

a material effect on the Exchange’s 

ability to carry out its duties and 

obligations as an SRO. 

LabMorgan Corp., a Member of the 

Exchange, notified the Exchange it has 

changed its legal name to JPMC 

Strategic Investments I Corporation. The 

updated name of this Member is 

reflected in the amendment to the 

Exchange LLC Agreement attached [sic] 

hereto as Exhibit 5B. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the 

Act,26 in general, and furthers the 

objectives of Section 6(b)(1),27 in 

particular, in that it enables the 

Exchange to be so organized so as to 

have the capacity to be able to carry out 

the purposes of the Act and to comply, 

and to enforce compliance by its 

exchange members and persons 

associated with its exchange members, 

with the provisions of the Act, the rules 

and regulations thereunder, and the 

rules of the Exchange. 

The Exchange believes that the 

proposed name change and changes in 

ownership are necessary to 

accommodate the desires of certain 

Members to arrange their affairs, 

including to exit ownership of the 

Exchange and BOX Holdings. The 

Exchange believes that this filing 

furthers the objectives of Section 6(b)(5) 

of the Act because the proposed rule 

change would be consistent with and 

facilitate a governance and regulatory 

structure that 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 


khammond on DSKJM1Z7X2PROD with NOTICES
51414 Federal Register / Vol. 86, No. 176 / Wednesday, September 15, 2021 / Notices 

28See Securities Exchange Act Release No. 34– 

66871 (April 27, 2012) 77 FR 26323 (May 3, 2012) 

(Order granting approval of BOX Exchange). 

29See Securities Exchange Act Release No. 74477 

(March 11, 2015), 80 FR 13932 (March 17, 2015) 

(SR–BOX–2015–14). 

30See Securities Exchange Act Release No. 74403 

(March 18, 2016), 81 FR 15772 (March 24, 2016) 

(SR–BOX–2016–12). 

31 15 U.S.C. 78f(b)(1). 32 17 CFR 200.30–3(a)(12). 

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. 

Accordingly, the proposed ownership 

changes will ensure the continued 

operation of both the Exchange and 

BOX Holdings without any detrimental 

effect on the operations of either the 

Exchange or its facility. 

Further, the Exchange believes the 

proposed name change and ownership 

changes are consistent with, and will 

not interfere with, the self-regulatory 

obligations of BOX Exchange. The 

Exchange importantly notes that it is not 

proposing to amend any of the 

provisions within the Holdings LLC 

Agreement or the BOX Exchange LLC 

Agreement dealing with the availability 

or protection of information, books and 

records, undue influence, conflicts of 

interest, unfair control by an affiliate, 

and regulatory independence of BOX 

Exchange.28 In addition, the ownership 

changes proposed by the Exchange in 

this filing are consistent with past 

ownership and voting levels held by 

Members of BOX Holdings, MXUS2 has 

previously held voting power in BOX 

Holdings in excess of 50% 29 and IB has 

previously held a Percentage Interest in 

BOX Holdings greater than 25%.30 The 

ability of the Exchange to operate and 

fulfill its regulatory responsibilities will 

continue unaffected by this proposal 

and the Exchange will continue to be 

able to serve its independent regulatory 

functions as an SRO after the proposed 

transactions are consummated. 

The Exchange also believes that this 

filing furthers the objectives of Section 

6(b)(5) of the Act 31 in that it is designed 

to facilitate transactions in securities, 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. The 

Exchange believes these objectives are 

supported by having active, interested 

owners of the Exchange. The Exchange 

further believes accommodating the 

transfer of ownership interests in the 

Exchange and its facility between 

willing buyers and sellers ensures the 

health and vitality of the Exchange and 

encourages robust interest in the 

Exchange’s operations, which promotes 

effective, efficient markets. 

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 because the 

changes proposed are limited to 

ownership of the Exchange and an 

affiliate of a facility of the Exchange and 

do not change the operation of the 

Exchange or any facility of the 

Exchange. The proposed rule change is 

not designed to address any competitive 

issue or have any impact on 

competition; rather the proposed rule 

change lays out the transfer ownership 

interests. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received comments on the proposed 

rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

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– 

BOX–2021–19 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–2021–19. This file 

number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

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

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

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

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549, on official 

business days between the hours of 

10:00 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–BOX–2021–19, and should 

be submitted on or before October 6, 

2021. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.32

J. Matthew DeLesDernier, 

Assistant Secretary. 

[FR Doc. 2021–19864 Filed 9–14–21; 8:45 am] 

BILLING CODE 8011–01–P 


khammond on DSKJM1Z7X2PROD with NOTICES