Federal Register / Vol. 82, No. 171 / Wednesday, September 6, 2017 / Notices 42195 

1A company might not be prepared to elect to be 

subject to Sections 55 through 65 of the 1940 Act 

because its capital structure or management 

compensation plan is not yet in compliance with 

the requirements of those sections. 

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 Securities Exchange Release No. 81292 

(August 2, 2017), 82 FR 37144 (August 8, 

2017)(Order Approving SR–BOX–2016–48 as 

modified by Amendment Nos. 1 and 2). 

6 Id. 

subject to Sections 55 through 65 of the 

Investment Company Act of 1940 (15 

U.S.C. 80a–1 et seq.) (‘‘1940 Act’’). 

Certain companies may have to make a 

filing with the Commission before they 

are ready to elect to be regulated as a 

business development company.1 A 

company that is excluded from the 

definition of ‘‘investment company’’ by 

Section 3(c)(1) because it has fewer than 

one hundred shareholders and is not 

making a public offering of its securities 

may lose such an exclusion solely 

because it proposes to make a public 

offering of securities as a business 

development company. Such company, 

under certain conditions, would not 

lose its exclusion if it notifies the 

Commission on Form N–6F of its intent 

to make an election to be regulated as 

a business development company. The 

company only has to file a Form N–6F 

once. 

The Commission estimates that on 

average approximately 12 companies 

file these notifications each year. Each 

of those companies need only make a 

single filing of Form N–6F. The 

Commission further estimates that this 

information collection imposes burden 

of 0.5 hours, resulting in a total annual 

PRA burden of 6 hours. Based on the 

estimated wage rate, the total cost to the 

industry of the hour burden for 

complying with Form N–6F would be 

approximately $2,070. 

The collection of information under 

Form N–6F is mandatory. The 

information provided under the form is 

not kept confidential. An agency may 

not conduct or sponsor, and a person is 

not required to respond to, a collection 

of information unless it displays a 

currently valid OMB control number. 

Written comments are invited on: (a) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, including whether the 

information will have practical utility; 

(b) the accuracy of the agency’s estimate 

of the burden of the collection of 

information; (c) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (d) ways to 

minimize the burden of the collection of 

information on respondents, including 

through the use of automated collection 

techniques or other forms of information 

technology. Consideration will be given 

to comments and suggestions submitted 

in writing within 60 days of this 

publication. 

Please direct your written comments 

to Pamela Dyson, Director/Chief 

Information Officer, Securities and 

Exchange Commission, C/O Remi 

Pavlik-Simon, 100 F Street NE., 

Washington, DC 20549; or send an email 

to: PRA_Mailbox@sec.gov. 

Dated: August 31, 2017. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–18859 Filed 9–5–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–81504; File No. SR–BOX– 

2017–28] 

Self-Regulatory Organizations; BOX 

Options Exchange LLC; Notice of 

Filing and Immediate Effectiveness of 

a Proposed Rule Change To Establish 

Fees and Rebates for the Trading Floor 

on the BOX Market LLC (‘‘BOX’’) 

Options Facility 

August 30, 2017. 

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

Securities Exchange Act of 1934 (the 

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

notice is hereby given that on August 

21, 2017, BOX Options Exchange LLC 

(the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Exchange filed the proposed rule change 

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

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

which renders the proposal effective 

upon filing with the Commission. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

The Exchange is filing with the 

Securities and Exchange Commission 

(‘‘Commission’’) a proposed rule change 

to amend the Fee Schedule to establish 

fees and rebates for the Trading Floor on 

the BOX Market LLC (‘‘BOX’’) options 

facility. While changes to the fee 

schedule pursuant to this proposal will 

be effective upon filing, the changes will 

become operative on August 22, 2017. 

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 Web site 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 for trading on BOX to 

create a new fee and rebate structure for 

manual transactions initiated from the 

BOX Trading Floor. The Exchange 

recently adopted rules to allow for an 

open outcry Trading Floor.5

The Exchange represented in its filing 

with the Securities and Exchange 

Commission (‘‘SEC’’ or the 

‘‘Commission’’) to establish the Trading 

Floor that, ‘‘the Exchange has not yet 

determined the fees for transactions 

executed on the Trading Floor. Prior to 

commencing trading on the Trading 

Floor, the Exchange will file proposed 

fees with the Commission.’’ 6 As the 

Exchange intends to begin trading on 

the Trading Floor on August 22, 2017, 

it is submitting this filing to describe the 

fees that will be applicable to 

transactions presented on the Trading 

Floor. 

Section I. Exchange Fees 

The Exchange proposes to amend the 

language to the title of Section I. to 

differentiate between electronic 

transaction fees and manual transaction 

fees. Currently, the Exchange assesses 

Exchange Fees based on transaction 

types and account types. The Exchange 

proposes to add ‘‘Electronic 

Transaction’’ and remove ‘‘Exchange’’ to 

the title of Section I to distinguish that 

Section I fees only apply to transactions 

that are initiated electronically through 


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7See BOX Rule 100(a)(66). Electronic transactions 

are those initiated electronically, as opposed to 

transactions initiated and presented on the Trading 

Floor in open outcry. 

8See BOX Rule 7600. The QOO Order must be 

entered as a two-sided order when it is submitted 

to the Exchange for execution through the BOX 

Order Gateway (‘‘BOG’’). 

9BOX’s auction mechanisms include the Price 

Improvement Period (‘‘PIP’’), Complex Order Price 

Improvement Period (‘‘COPIP’’), Facilitation 

Auction and Solicitation Auction. 

10A Floor Market Maker is an Options Participant 

of the Exchange located on the Trading Floor who 

has received permission from the Exchange to trade 

in options for his own account. A Floor Broker is 

an individual who is registered with the Exchange 

for the purpose, while on the Trading Floor, of 

accepting and handling options orders. A Floor 

Broker must be registered as an Options Participant 

prior to registering as a Floor Broker. The Exchange 

notes that the Floor Market Maker fee and the Floor 

Broker Dealer fee will be paid by the Floor Market 

Maker or Floor Broker Dealer entities, respectively. 

the Trading Host as opposed to 

transactions initiated and presented on 

the Trading Floor in open outcry 

(manual transactions).7 The Exchange 

also proposes to clarify that a 

Participant’s electronic and manual 

transaction volume will be considered 

for purposes of calculating the volume 

thresholds within the fee schedule, 

including the Tiered Volume Rebates for 

Non-Auction Transactions (Section 

I.A.1), Primary Improvement Order fees 

(Section 1.B.1), and BOX Volume Rebate 

(Section I.B.2). Further, the Exchange 

proposes to make changes throughout 

the Fee Schedule to distinguish between 

electronic transaction and manual 

transaction fees. 

Section II. Manual Transaction Fees 

The Exchange then proposes to adopt 

a new section (Section II. Manual 

Transaction Fees) and renumber the 

subsequent sections accordingly. As 

discussed above, manual transactions 

are transactions initiated and presented 

on the Trading Floor in open outcry, as 

opposed to those initiated 

electronically. Manual transactions 

consist of Qualified Open Outcry 

(‘‘QOO’’) Orders.8 A QOO Order must 

be entered as a two-sided order, an 

initiating side and a contra-side, and the 

QOO Order fees, rebates and applicable 

fee and rebate caps will apply to both 

sides of the order. 

Similar to the fees assessed for 

electronic transactions, the Exchange 

proposes to assess fees for manual 

transactions based on account type. For 

Public Customers, the Exchange 

proposes to assess a $0.00 per contract 

fee for manual transactions in Penny 

and Non-Penny Pilot Classes. For 

Professional Customers, Broker Dealers 

and Market Makers, the Exchange 

proposes to assess a $0.25 per contract 

fee for manual transactions in Penny 

and Non-Penny Pilot classes. 

The Exchange proposes to add an 

additional account type, Broker Dealer 

Facilitating a Public Customer, which 

will apply to any manual transaction 

executed using the open outcry process, 

where the Broker Dealer and the Public 

Customer both clear through the same 

clearing firm and the Broker Dealer 

clears in the customer range. The 

Exchange proposes to assess a $0.00 per 

contract fee for Broker Dealers 

Facilitating a Public Customer in Penny 

and Non-Penny Pilot Classes. For 

example, if a Floor Broker presents a 

QOO Order on the Trading Floor where 

the initiating side is a Public Customer 

and the contra side is the Broker Dealer 

guaranteeing the full size of the order, 

the Public Customer will be assessed a 

$0.00 per contract fee on the initiating 

side and the Broker Dealer will be 

assessed a $0.00 per contract fee for the 

contra-side. 

The Exchange then proposes to 

establish a QOO Order fee cap for 

Broker Dealers of $75,000 per month per 

Broker Dealer. Again, the Exchange 

notes that both sides of the paired QOO 

Order will count towards reaching the 

fee cap for each Broker Dealer. 

The Exchange then proposes to add 

Section II.B., QOO Orders Executed 

Against Orders on the BOX Book. 

Specifically, the Exchange proposes that 

the initiating side of a QOO Order 

executing against an order on the BOX 

Book will be treated as a manual 

transaction for purposes of the Fee 

Schedule and will be subject to the fees 

and rebates in proposed Section II 

(Manual Transaction Fees). The 

corresponding order on the BOX Book 

will be treated as an electronic 

transaction and continue to be subject to 

the fees in Section I (Electronic 

Transaction Fees). 

The Exchange proposes to adopt 

Section II.C., QOO Order Rebate. BOX 

Floor Brokers will receive a $0.05 per 

contract rebate for all QOO Orders 

presented to the Trading Floor for both 

sides of the QOO Order. However, the 

rebate will not apply to Public Customer 

manual executions; or Broker Dealer 

manual executions where the Broker 

Dealer is facilitating a Public Customer. 

The total monthly rebate for Broker 

Dealer executions will be capped at 

$30,000 per month per Broker Dealer. 

For example, Broker Dealer A submits 

a 200 contract buy order to a Floor 

Broker B, and the Floor Broker B pairs 

that initiating order with Broker Dealer 

C’s 200 contract sell order to create a 

QOO Order that will be presented on 

the Trading Floor in open outcry. 

During open outcry, Floor Broker D 

offers to sell 50 contracts on behalf of 

Broker Dealer E. The 200 contract QOO 

Order is then submitted to the Exchange 

for execution through the BOG. 

Following the allocation of the 

initiating side of the QOO Order: 

• Broker Dealer A would be assessed 

a $0.25 fee and Floor Broker B would 

receive a $0.05 rebate on the initiating 

200 contracts. 

• Broker Dealer C would be assessed 

a $0.25 fee and Floor Broker B would 

receive a $0.05 rebate on its 150 contra 

side contracts that receive allocation. 

• Broker Dealer E would be assessed 

a $0.25 fee and Floor Broker D would 

receive a $0.05 rebate on its 50 contra 

side contracts that received allocation. 

To continue on this example, if Floor 

Broker D offered to sell 50 contracts on 

behalf of Public Customer F instead of 

Broker Dealer E. Public Customer F 

would be assessed no fees and Floor 

Broker D would receive no rebates on its 

50 contra side contracts that received 

allocation. On a monthly basis, these 

QOO Order fees for Broker Dealer A, 

Broker Dealer C, and Broker Dealer E 

would each be capped at $75,000; and 

the QOO Order Rebate for Floor Brokers 

B and D would be capped at $30,000 per 

Broker Dealer. 

Proposed Section IV. Complex Order 

Transaction Fees 

The Exchange proposes to amend 

proposed Section IV (Complex Order 

Transaction Fees) to clarify that 

transaction fees and credits set forth in 

this section will not apply to (i) 

Complex Order Electronic transactions 

executed through the Auction 

Mechanisms 9 which will be subject to 

Sections I (Electronic Transaction Fees) 

and proposed Section III (Liquidity Fees 

and Credits) and (ii) Complex Order 

Manual Transactions which will be 

subject to proposed Section II (Manual 

Transaction Fees). 

Proposed Section IX. Participant Fees 

The Exchange proposes to establish 

distinct Participant fees for its Floor 

Participants. The proposed Floor 

Participant Permit fees will be in 

addition to the Participant Fees already 

in place; a one-time $2,500 Initiation 

Fee, and a monthly $1,500 Participant 

Fee. The Exchange proposes to establish 

a Floor Market Maker fee of $5,500 per 

month, a Floor Broker fee of $500 per 

month and a Badge fee of $100 per 

month.10 The Exchange notes that the 

Floor Market Maker fee and Floor 

Broker fee entitles the Participant to 

three registered permits on the BOX 

Trading Floor. Further, Badge fees will 

be paid by each Participant (Floor 

Market Maker or Floor Broker) for any 


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11For similar Trading Floor Permits for Floor 

Market Makers, Chicago Board Options Exchange 

(‘‘CBOE’’) charges $5,000; NASDAQ PHLX LLC 

(‘‘PHLX’’) charges $4,500; NYSE Arca (‘‘Arca’’) 

charges up to $6,000; and NYSE American 

(‘‘American’’) charges up to $10,000. For Floor 

Brokers, CBOE charges $9,000 per month; PHLX 

charges $3,000 per month; Arca charges $500 per 

month; and American charges $500 per month. 

12 15 U.S.C. 78f(b)(4) and (5). 

13See CBOE Fee Schedule; PHLX Pricing 

Schedule; Arca Options Fees and Charges; and 

American Options Fee Schedule. 

14For manual transactions, CBOE charges Broker 

Dealers $0.25 and charges Market Makers between 

$0.23 and $0.03, depending on their volume 

thresholds based on total national Market Maker 

volume. CBOE does not charge public customers for 

manual transactions. On Phlx, Broker Dealers and 

Professionals are charged $0.25 for floor 

transactions while Market Makers are charged 

$0.35. Similar to CBOE, Phlx does not charge public 

customers for their floor transactions. On Arca, 

Broker Dealers, Professional Customers and Market 

Makers are charged $0.25 for their manual 

executions, while public customers are not charged. 

Lastly, on American for manual transactions, Broker 

Dealers and Professional Customers are charged 

$0.25, Market Makers are charged $0.20, and public 

customers are not charged. 

15See BOX Fee Schedule, current Section II.A. 

(Liquidity Fees and Credits for PIP and COPIP 

Transactions.) 

16See NYSE Arca Fee Schedule. Arca does not 

charge fees for manual executions for Firm 

Facilitation and Broker Dealers facilitating a 

Customer. Additionally, the Exchange notes that it 

is proposing a similar definition for ‘‘Broker Dealers 

facilitating a Customer’’ as defined in Arca’s Fee 

Schedule. See also NASDAQ PHLX LLC (‘‘PHLX’’) 

Fee Schedule. PHLX does not charge fees for a 

transaction in which a Broker-Dealer facilitates a 

Customer order. 

17See Phlx Pricing Schedule. Phlx subjects Firms 

to a maximum fee of $75,000 per month for floor 

transactions. 

18See American Fee Schedule Section I.I (Firm 

Month Fee Cap). American has a monthly Firm Fee 

Cap for Manual transactions of $100,000. Firms are 

defined as ‘‘a Broker Dealer that is not registered as 

Continued 

registered on-floor person employed by 

or associated with the Participant. 

Lastly, the Exchange notes that the 

Badge fee is not imposed on permit 

holders. The Exchange believes these 

Floor Participant Fees are competitive 

with similar fees at other option 

exchanges.11

Finally, the Exchange proposes to 

make a number of non-substantive 

changes to the Fee Schedule. First, the 

Exchange proposes to renumber the 

footnotes throughout the Fee Schedule. 

Second, the Exchange proposes to 

amend Section III (Complex Order 

Transaction Fees) with regard to Market 

Maker executed volume on BOX. 

Currently, the Fee Schedule states, ‘‘All 

Complex Order transactions will count 

toward a Market Maker’s monthly 

executed volume on BOX in Section 

I.B.’’ The Exchange proposes to correct 

the reference to Section I.A.1, as Section 

I.B is not accurate. Finally, the 

Exchange proposes to amend proposed 

Section III (Liquidity Fees and Credits) 

to clarify that a PIP Order or COPIP 

Order that executes against an Unrelated 

on the BOX Book shall be treated as a 

Non-Auction Transaction and deemed 

exempt from the Liquidity Fees and 

Credits in Section III. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of Section 6(b) of the Act, 

in general, and Section 6(b)(4) and 

6(b)(5) of the Act,12 in particular, in that 

it provides for the equitable allocation 

of reasonable dues, fees, and other 

charges among BOX Participants and 

other persons using its facilities and 

does not unfairly discriminate between 

customers, issuers, brokers or dealers. 

Manual Transaction Fees 

The Exchange believes the proposed 

fees for Manual Transactions on the 

Trading Floor are reasonable. 

Furthermore, several other competing 

exchanges have open outcry trading 

floors and market participants can 

readily direct order flow to any these 

venues if they deem BOX’s manual 

transaction fees to be excessive.13

The Exchange believes the $0.25 fee 

for Professional Customer, Broker 

Dealer, and Market Maker QOO Orders 

is reasonable. The proposed fees for 

these Manual transactions have been 

designed to be comparable to the fees 

that such orders would be charged at 

competing venues.14 Further, the 

Exchange believes that charging 

Professionals, Broker Dealers and 

Market Makers the same fee for all 

Manual Transactions is not unfairly 

discriminatory as the fees for QOO 

Orders are the same for Professionals, 

Broker Dealers and Market Makers. 

The Exchange believes it is equitable 

and not unfairly discriminatory that 

Public Customers be charged lower fees 

for Manual transactions than 

Professional Customers, Broker Dealers 

and Market Makers on BOX. The 

securities markets generally, and BOX 

in particular, have historically aimed to 

improve markets for investors and 

develop various features within the 

market structure for customer benefit. 

As such, the Exchange believes that not 

assessing a fee for Public Customer 

Manual transactions are appropriate, 

equitable and not unfairly 

discriminatory. The Exchange believes 

it promotes the best interests of 

investors to have lower transaction costs 

for Public Customers, and having no fee 

for QOO Orders will attract Public 

Customer order flow to the BOX Trading 

Floor. 

The Exchange believes that not 

charging a Broker Dealer facilitating a 

Public Customer is reasonable because it 

will encourage Broker Dealers to 

facilitate Public Customer orders 

through the Trading Floor and increase 

participation in open outcry, which will 

in turn promote increased executions on 

the Exchange which will benefit all 

BOX Participants. As stated above, 

BOX’s market model and fees are 

generally intended to benefit retail 

customers by providing incentives for 

Participants to submit their customer 

order flow to BOX.15 Further, the 

Exchange believes this proposal is 

reasonable and appropriate; as it is in 

line other exchanges with open outcry 

trading floors.16

In addition, the proposed change is 

equitable and not unfairly 

discriminatory because it is open to all 

Broker Dealers on an equal basis. 

Further, the BOX Trading Floor will 

provide the opportunity for all market 

participants to compete for these 

customer orders, as there are no 

limitations regarding the number of 

Market Makers or Floor Brokers that can 

participate and compete for a QOO 

Order in open outcry. 

Finally, the Exchange believes that 

the proposed difference between what a 

Broker Dealer facilitating a Public 

Customer will pay, compared to what a 

responder to the QOO Order will pay is 

reasonable, equitable and not unfairly 

discriminatory. As stated above, this 

difference is in-line with the credits and 

fees at competing exchanges. The 

Exchange believes that this differential 

is reasonable because responders are 

willing to pay a higher fee for liquidity 

discovery. Further, the Broker Dealer is 

guaranteeing the execution when 

submitting the QOO Order to floor, 

compared to the other Floor Participants 

who have no obligation to respond. 

The Exchange believes that the QOO 

Order fee cap for Broker Dealers is 

reasonable and appropriate. The 

proposed fee cap of $75,000 per month 

per Broker Dealer is the same amount as 

another fee cap at a competing exchange 

with an open outcry trading floor.17

Further, the Exchange believes that this 

proposed fee cap is equitable and not 

unfairly discriminatory because it 

provides incentives for Broker Dealers 

to submit floor transactions on the 

Exchange, which brings increased 

liquidity and order flow to the floor for 

the benefit of all market participants. 

Lastly, the Exchange believes that 

applying this fee cap to only Broker 

Dealers is reasonable and appropriate as 

another exchange in the industry has a 

similar cap.18 The Exchange believes 


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a dealer-specialist or Market Maker that is an ATP 

Holder on the Exchange.’’ The Exchange notes that 

American has in place a $0.01 incremental service 

fee that is applied once a Firm has reached the 

monthly cap. The Exchange is not proposing a 

similar service fee at this time. See also Arca Fee 

Schedule (Firm and Broker Dealer Monthly Fee 

Cap). 

19See NYSE Arca, Qualified Contingent Cross 

(‘‘QCC’’) Transactions Fees and Rebate. The Floor 

Broker Rebate for Executed Orders is a flat rebate 

and is applied to both sides of the QCC Order 

except when a Customer is on both sides of the QCC 

transaction. 

20BOX notes that while QCC Orders are also 

offered on the Exchange, only QOO Orders are 

allowed to be presented to the BOX Trading Floor 

for open outcry. 

21See Securities Exchange Release No. 77568 

(April 8, 2016), 81 FR 22151 (April 14, 2016). 

22See supra note 11. 

that to attract orders from Broker 

Dealers, via a Floor Broker, the rates 

must be competitive with rates at other 

trading floors. 

Further, the Exchange believes that 

applying the cap to only Broker Dealers 

is equitable and not unfairly 

discriminatory to Public Customers and 

Broker Dealers facilitating a Public 

Customer because these Participants are 

not charged any fees for their manual 

transactions. Additionally, the Exchange 

believes it is equitable and not unfairly 

discriminatory to not apply a fee cap on 

Floor Market Maker manual 

transactions. Market Makers do not need 

the same incentives as Broker Dealers to 

submit order flow to the BOX Trading 

Floor. Broker Dealers require a Floor 

Broker to represent their trading interest 

on the Trading Floor as compared to a 

Market Maker that could directly 

transact such orders on the Trading 

Floor. 

QOO Order Rebate 

The Exchange believes that the 

proposed $0.05 QOO Order Rebate for 

Floor Brokers is reasonable, equitable 

and not unfairly discriminatory. The 

Exchange notes that it does not offer a 

front-end for order entry on the Trading 

Floor, unlike some competing 

exchanges. As such, the Exchange 

believes it is necessary from a 

competitive standpoint to offer this 

rebate to the executing Floor Broker on 

a QOO order. A similar flat rebate is 

offered to Floor Brokers on a competing 

exchange.19 Similar to the Floor Broker 

Rebate for Executed QCC Transactions, 

the proposed QOO Order rebate is 

applied to both sides of the paired order 

and is directed to the Floor Broker and 

not to the Participant who is assessed 

the QOO Order fee. In other words, the 

NYSE Floor Broker Rebate is applied to 

the Floor Broker who executes the QCC 

Order for another NYSE Member, even 

though that Member is assessed the 

$0.20 fee per contract. Finally, the 

rebate is only applied when the Floor 

Broker executes the QCC Order 

manually on the NYSE Arca trading 

floor. No rebate is given when the QCC 

Order is executed electronically.20

The Exchange notes that Participants 

have two possible means of bringing 

orders to the Exchange’s Trading Floor 

for possible execution: (1) They can 

invest in the technology, systems and 

personnel to participate on the Trading 

Floor and deliver the order to the 

Exchange matching engines for 

validation and execution; or (2) they can 

utilize the services of another 

Participant acting as a Floor Broker. The 

Exchange believes that offering the 

rebate will allow Floor Brokers to price 

their services at a level that would 

enable them to attract QOO order flow 

from participants who would otherwise 

utilize the front-end order entry 

mechanism offered by the Exchange’s 

competitors instead of incurring the cost 

in time and resources to install and 

develop their own internal systems to 

deliver QOO orders directly to the 

Exchange system. 

Further, the Exchange believes that to 

the extent Floor Brokers are able to 

attract QOO orders; they will gain 

important information that would allow 

them to solicit the parties to the QOO 

orders for participation in other trades. 

This will in turn, benefit other Exchange 

participants through additional liquidity 

on the Trading Floor that could occur as 

a result. 

The Exchange believes it is equitable 

and not unfairly discriminatory to only 

apply the rebate to Floor Brokers and 

not to Floor Market Makers. As stated 

above, Floor Market Makers only 

represent their own interest on the 

Trading Floor and therefore do not need 

a similar incentive. Further, the 

Exchange believes it is equitable and not 

unfairly discriminatory to not apply the 

rebate to Public Customers or Broker 

Dealers where the Broker Dealer is 

facilitating a Public Customer, as these 

executions are not assessed a fee for 

their QOO Orders. The Exchange also 

believes that the $30,000 rebate cap for 

Broker Dealer executions is equitable 

and not unfairly discriminatory as 

Broker Dealer QOO Order execution fees 

are capped at $75,000 per month and 

other QOO Order fees are not. 

QOO Orders Executed on the BOX Book 

The Exchange believes that treating 

the initiating side of the QOO Order that 

executes against an order on the BOX 

Book as a manual transaction for 

purposes of the Fee Schedule and 

subject to Section II (Manual 

Transaction Fees), and treating the 

corresponding order on the BOX Book 

as an electronic transaction subject to 

Section I (Electronic Transaction Fees) 

is reasonable, equitable and not unfairly 

discriminatory. For example, the 

Exchange believes this proposal is 

reasonable and appropriate as it has 

adopted a similar methodology for 

Complex Orders that execute against 

orders on the BOX Book.21 Further, the 

Exchange believes that this proposed 

change is equitable and not unfairly 

discriminatory as it will reduce investor 

confusion with respect to the applicable 

QOO Order fees and rebates. Further, 

the Exchange believes that this proposal 

is consistent with what a Participant 

submitting an order on the Trading 

Floor would expect to pay, which will 

allow the Participant to more accurately 

forecast their floor based transaction 

fees. 

Complex Order Transaction Fees 

The Exchange believes that the 

proposed changes to Proposed Section 

IV (Complex Order Transaction Fees) 

are reasonable, equitable and not 

unfairly discriminatory as the changes 

are simply clarifying how Manual 

Complex Orders on the Trading Floor 

will be charged or credited as opposed 

to electronic Complex Orders. The 

Exchange notes that the Exchange 

currently differentiates between 

Complex Orders executed on the 

Exchange versus Complex Orders 

executed within BOX’s Auction 

Mechanisms. The Exchange is simply 

clarifying that Manual Complex Orders 

presented on the Trading Floor will be 

subject to a different section of the BOX 

Fee Schedule, specifically proposed 

Section II (Manual Transaction Fees). 

Participant Fees 

The Exchange’s proposed Trading 

Floor Permit fees of $5,500 per month 

for Floor Market Makers, $500 per 

month for Floor Brokers and $100 per 

month for any Badge Fees are 

reasonable and appropriate. 

Specifically, the proposed fees are 

competitive with similar participant 

fees at other options exchanges with 

open outcry trading floors.22

The Exchange believes that it is 

equitable and not unfairly 

discriminatory to charge Floor Market 

Makers more per month than Floor 

Brokers. Floor Market Makers benefit 

from the access they have to interact 

with orders which are made available in 

open outcry on the Trading Floor. As 


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Federal Register / Vol. 82, No. 171 / Wednesday, September 6, 2017 / Notices 42199 

23See CBOE Fees Schedule and NYSE Arca Fee 

Schedule. CBOE charges a $120 (Floor Manager) or 

$60 (Clerks) badge fees for their Floor Participants. 

NYSE Arca charges $50 per badge. 

24 15 U.S.C. 78s(b)(3)(A)(ii). 25 17 CFR 240.19b–4(f)(2). 26 17 CFR 200.30–3(a)(12). 

stated above, these market participants 

may choose to conduct their business on 

the Trading Floor, unlike Floor Brokers, 

who have a business model that is 

naturally tied to the physical trading 

space. The Exchange offers Market 

Makers a choice on how to conduct 

business, only electronic or floor and 

electronic. The Exchange believes that it 

is equitable and not unfairly 

discriminatory to assess Floor Market 

Makers the higher monthly fee because 

they have the benefit of trading on both 

if they so choose. 

Lastly, the Exchange believes the 

monthly Badge Fee of $100 is 

reasonable as it is in line with other 

similar fees at a competing exchange.23

Further, the Exchange believes that the 

monthly Badge Fee is equitable and not 

unfairly discriminatory because the 

Badge Fee will be assessed uniformly to 

each person authorized by the BOX 

Participant, regardless of Participant 

type. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. The 

Exchange notes that it operates in a 

highly competitive market in which 

market participants can readily favor 

competing venues if they deem fee 

levels at a particular venue to be 

excessive, or rebate opportunities 

available at other venues to be more 

favorable. In such an environment, the 

Exchange must continually adjust its 

fees to remain competitive with other 

exchanges. Because competitors are free 

to modify their own fees in response, 

the Exchange believes that the degree to 

which fee changes in this market may 

impose any burden on competition is 

limited. For the reasons discussed 

above, the Exchange believes that the 

proposed changes do not impose an 

undue burden on competition. 

The Exchange does not believe that 

assessing no fee on Broker Dealers 

facilitating Public Customer will burden 

competition by creating such a disparity 

between the fees that an initiating 

Broker Dealer pays and the fees a 

competitive responder pays that would 

result in certain Participants being 

unable to compete with initiators. In 

fact, the Exchange believes that the 

proposed fees will not impair these 

Participants from adding liquidity and 

competing in open outcry on the 

Trading Floor and will help promote 

competition by providing incentives for 

market participants to submit customer 

order flow to the BOX Trading Floor 

and thus, create a greater opportunity 

for customer executions. 

Further, the Exchange does not 

believe that offering a rebate to Floor 

Brokers will impose an undue burned 

[sic] on intra-market competition 

because all Floor Brokers are eligible to 

transaction [sic] QOO Orders and 

receive a rebate. Further, the Exchange 

believes that the rebate will promote 

competition by allowing Floor Brokers 

to competitively price their services and 

for the Exchange to remain competitive 

with other exchanges that offer frontend order entry on their trading floors. 

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 

The foregoing rule change has become 

effective pursuant to Section 

19(b)(3)(A)(ii) of the Exchange Act 24

and Rule 19b–4(f)(2) thereunder,25

because it establishes or changes a due, 

or fee. 

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission summarily may 

temporarily suspend the rule change if 

it appears to the Commission that the 

action is necessary or appropriate in the 

public interest, for the protection of 

investors, or would otherwise further 

the purposes of the Act. If the 

Commission takes such action, the 

Commission shall institute proceedings 

to determine whether the proposed rule 

should be approved or disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

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–2017–28 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–2017–28. 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 

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

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– 

2017–28, and should be submitted on or 

before September 27, 2017. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.26

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2017–18798 Filed 9–5–17; 8:45 am] 

BILLING CODE 8011–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Commission will host the SEC–NYU 

Dialogue on Securities Markets— 

Exchange-Traded Products (ETPs) on 

Friday, September 8, 2017 beginning at 


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