Document ID: SEC-2020-2113-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Exchange, LLC
Posted Date: 2020-12-30T05:00Z

[Federal Register Volume 85, Number 250 (Wednesday, December 30, 2020)]
[Notices]
[Pages 86610-86614]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-28890]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90792; File No. SR-BOX-2020-38]

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
of Proposed Rule Change To Amend BOX Rule 7620 (Accommodation 
Transactions)

December 23, 2020.
    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 December 10, 2020, BOX Exchange LLC (``Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change as described in Items I and II below, which Items have been 
prepared by the self-regulatory organization. The Commission is 
publishing this notice to solicit comments on the proposed rule from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 7620 (Accommodation 
Transactions) to allow Floor Brokers to enter opening cabinet orders on 
behalf of customers and Floor Market Makers, and codify that cabinet 
trades will follow open outcry rules pursuant to Exchange Rule 7600. 
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
    First, the proposed rule change is to amend Rule 7620 
(Accommodation Transactions) to allow Floor Brokers to enter opening 
cabinet orders on behalf of customers \3\ and Floor Market Makers. This 
is a competitive filing that is based on cabinet trading functionality 
at Cboe Exchange, Inc. (``Cboe'').\4\
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    \3\ Customers of the Floor Broker can include Public Customers, 
Broker Dealers and Market Makers.
    \4\ See Cboe Rule 5.85(h) (previously, Cboe Rule 6.54 
Accommodation Liquidations (Cabinet Trades); see also Securities 
Exchange Release No. 34-73974 (December 31, 2014) (Order Approving 
SR-CBOE-2014-93)(explaining under the [cabinet trade] procedures, 
bids and offers (whether opening or closing a position) at a price 
of $1 per option contract may be represented in the trading crowd by 
a Floor Broker . . . but must yield priority to all resting orders 
in the [ ] cabinet book (which resting cabinet book orders may be 
closing only); Securities Exchange Release No. 34-86994 (September 
23, 2019) (SR-CBOE-2019-058) (noting inadvertent removal of rule 
language and current proposal to clarify and explicitly state market 
participants may continue to place opening cabinet orders, so long 
as they yield to all closing cabinet orders represented by the 
trading crowd).

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[[Page 86611]]

    As background, with respect to the proposed change, the Exchange 
adopted cabinet trading on the Exchange's Trading Floor.\5\ Under the 
current BOX Rule 7620 (Accommodation Transactions), only closing 
cabinet transactions at a price of $1 per option contract for the 
account of a customer or Floor Market Maker are allowed. In addition, 
the rule specifies that opening orders are not cabinet orders, but 
opening orders in certain cases may be matched with a cabinet order.\6\ 
The Exchange now wishes to allow opening cabinet orders to further 
accommodate additional cabinet transactions on the Exchange Trading 
Floor.
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    \5\ See Securities Exchange Release No. 34-85803 (May 8, 2019) 
(Notice of filing and immediate effectiveness SR-BOX-2019-16).
    \6\ See BOX Rule 7620(c), (d), and (e).
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    The Exchange first proposes to amend the definition of cabinet 
orders to include bids and offers (whether opening or closing) at a 
price of $1 per option contract for the account of a customer or Floor 
Market Maker.
    The Exchange expects the majority of opening cabinet orders to be 
submitted by Market Makers (e.g., Floor Market Makers or Away Market 
Makers), but intends to offer the potential benefits of these 
transactions to all participants.\7\ As liquidity providers, Market 
Makers play a vital role in the financial markets and help to 
facilitate market efficiency and price discovery. Market Makers engage 
in a course of dealings for their own account to assist with the 
maintenance of a fair and orderly market. Market Makers must 
consistently manage portfolio risk and seek opportunities to hedge 
their exposures in order to maintain a risk-neutral position. Failure 
to rebalance portfolios and continuously hedge exposes Market Makers to 
undesirable risk. Therefore, permitting Market Makers to submit opening 
cabinet orders, while yielding priority to all closing cabinet orders, 
will enable Market Makers (or other market participants) to hedge away 
unwanted exposure and get back to a risk-neutral position.
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    \7\ Although the Exchange anticipates that Market Makers would 
be the primary market participant involved in submitting opening 
cabinet trades, the Exchange proposes to offer the order type to all 
participants for competitive reasons. The Exchange notes that its 
competitors offer all participants the ability to submit opening 
cabinet orders, and therefore, the Exchange wishes to offer the same 
opportunities. See Securities Exchange Release No. 34-86994 
(September 17, 2019) (Notice of Filing and Immediate Effectiveness 
SR-CBOE-2019-058) (stating that ``market participants may continue . 
. . to place opening cabinet orders, which must continue to yield to 
all closing cabinet orders represented by the trading crowd.''); See 
also NYSEArca Rule 6.80-O(b)(3) (stating ``[Cabinet] [o]rders may be 
placed for customer, firm and Market Maker accounts . . .'').
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    As an example of the proposed rule change, consider the following:
    Assume Market Maker (MM1) has the following positions:

(Position 1): Long 300 put contracts on XYZ with a May 2020 expiration 
date, and a $105 strike price
(Position 2): Short 300 put contracts on XYZ with a May 2020 expiration 
date, and a $100 strike price
    XYZ stock is currently at $50 per share.

    If MM1 then exercises Position 1 (Long 105 puts). MM1's positions 
are now:

(Position 2): Short 300 put contracts on XYZ with a May 2020 expiration 
date, and a $100 strike price
(Position 3): Short 30,000 \8\ Shares of XYZ stock (because MM1 
exercised Position 1 and now has the right to sell 30,000 Shares of the 
underlying stock)
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    \8\ Example assumes each contract covers 100 shares of the 
underlying stock, therefore, 300 contracts multiplied by 100 shares 
of the underlying stock is 30,000 shares.

    With this change MM1's current risk is XYZ's stock price rising 
past $100 per share, a risk exposure that is theoretically unlimited. 
In the industry having these types of positions is called being 
``synthetically short''.\9\ In order for MM1 to hedge the risk of the 
stock price going past $100 per share, MM1 would seek to offset the 
risk of his current Positions (2 and 3) by submitting an opening 
cabinet bid for 300 XYZ call contracts with a May 2020 expiration, at a 
$100 strike price (Position 4).\10\
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    \9\ Synthetic options are trading positions holding a number of 
securities that when taken together, emulate another position. See 
Synthetic Options, www.corporatefinanceinstitute.com, https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/synthetic-options/.
    \10\ The Exchange notes, although submitted as an ``opening'' 
trade, this order is in effect ``closing'' synthetically for the 
Market Maker and transferring risk from that Market Maker's books to 
another Market Maker more comfortable with that risk exposure. The 
Exchange also notes that this opening bid would be for a series that 
is not actively traded and therefore would be in line with the 
primary purposes of cabinet trading because the Market Maker could 
now trade in a series that is not actively traded in order to 
synthetically close their position and hedge unwanted portfolio 
risk.
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    MM1 would have the following positions:

(Position 2): Short 300 put contracts on XYZ with a May 2020 expiration 
date, and a $100 strike price
(Position 3): Short 30,000 \11\ Shares of XYZ stock
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    \11\ See supra note 8.
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(Position 4): Long 300 call contracts of XYZ with a May 2020 expiration 
at a $100 strike price

    After purchasing Position 4, MM1 will have effectively paired off 
Positions 2 and 3, and hedged against any previous risk of the XYZ 
stock price going over $100 per share.
    Next, the Exchange proposes to make numerous changes to Rule 7620 
to reduce confusion and clarify certain terms and conditions.
    First, the Exchange proposes to add language to codify that Cabinet 
Orders may only be executed on the Exchange's Trading Floor in open 
outcry pursuant to Rule 7600 series. This language is intended to 
clarify that cabinet orders may execute in open outcry like all other 
orders execute in open outcry, in accordance with the order allocation, 
priority, and execution rules applicable to Qualified Open Outcry 
(``QOO'') Orders. The Exchange notes, the proposed changes do not 
substantively alter the manner in which cabinet orders may trade 
currently. The Exchange believes clarifying that cabinet orders follow 
the same trading floor rules as all other open outcry orders will 
simplify the rules of cabinet orders for Participants, making the rules 
for cabinet transactions easier to follow and understand. The Exchange 
notes this part of the proposal is similar to Cboe's cabinet order 
rule.\12\ In addition, as described in further detail below, 
Participants will no longer be required to conduct cabinet trades 
through a manual process which includes filling out and submitting 
forms to the Exchange.
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    \12\ See Cboe Rule 5.85(h). Cabinet orders on Cboe follow the 
order allocation and priority rules that are applicable to the 
execution of all orders in open outcry.
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    In addition, the Exchange believes the proposal, as discussed 
herein, would make clear that the split-price priority provisions 
within Rule 7600 series will apply to cabinet trades in open 
outcry.\13\ The Exchange believes that expressly including that split-
price priority provisions will apply to open outcry cabinet trading 
would clarify to Participants that this functionality is available on 
the Exchange. The Exchange believes not offering split-price 
functionality for cabinet orders unnecessarily limits the ability of 
market participants to manually trade cabinet orders on the floor. In 
addition, restricting split-pricing for cabinet trades would 
unreasonably restrict

[[Page 86612]]

business by not making available certain prices which are available on 
other competing exchanges. Split-price priority for open outcry cabinet 
trades provides an extra incentive for market participants to both 
price improve and facilitate the efficient trading of options contracts 
that are worthless or not actively traded. The Exchange notes that at 
least one other competing options exchange (NYSE American LLC ``NYSE 
American'' f/k/a NYSE MKT LLC) amended their rule text to explicitly 
allow for split-price priority provisions to apply to cabinet 
trading.\14\ In the same manner, the Exchange now seeks to extend 
split-price priority to open outcry cabinet trades in order to have 
substantially similar rules to those of other exchanges with trading 
floors. The Exchange believes this will not only enable greater 
competition among competing exchanges that already offer this 
functionality, but also will align the Exchanges rules with competitors 
and thereby promotes efficiency and will help reduce any potential for 
investor confusion. The Exchange notes current Rule 7620 provides that 
cabinet trading shall be conducted in accordance with other Exchange 
rules except as otherwise provided within Rule 7620, which states, in 
part, that Exchange Rule 7050 (Minimum Trading Increments) shall not 
apply to orders placed in the cabinet. Accordingly, the Exchange 
believes there is no conflict between the Exchange's current rules and 
the proposed rule change.
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    \13\ See BOX Rule 7600(i) (Priority on Split-Price Transactions 
Occurring in Open Outcry).
    \14\ See Securities and Exchange Act Release No. 34-68128 
(November 1, 2012), 77 FR 66888 (November 7, 2012) (SR-NYSEMKT-2012-
55) (noticed by the Commission for immediate effectiveness). NYSEMKT 
noted that ``neither CBOE nor PHLX have a similar restriction [for 
split-price priority] on cabinet trades, and allow for split-price 
priority for cabinet trades on the trading floor.'' NYSEMKT cited to 
the prevailing Cboe and Phlx rules at the time, (specifically CBOE 
Rules 6.54 and 6.47 and PHLX Rule 1059) and emphasized that 
``[s]plit-price priority [was] available for open out-cry trading on 
both CBOE and PHLX, with no restriction for cabinet trades.'' Cboe 
Rule 6.54 was modified to the current rule text and moved to Cboe 
Rule 5.12. See Securities and Exchange Act Release No. 86994 
(September 17, 2019), 84 FR 49774 (September 23, 2019) (SR-CBOE-
2019-058). In Cboe's SR-CBOE-2019-058 rule filing, Cboe noted the 
rule change would not ``substantively alter the manner in which 
cabinet orders may trade,'' and stated that cabinet orders would 
execute ``in accordance with the order allocation, priority and 
execution rules . . . which is substantially similar to how cabinet 
trades currently function.'' Cboe's Cabinet Orders rule was 
subsequently relocated from Rule 5.12 to Rule 5.85(h), where it is 
currently located. See Securities and Exchange Act Release No. 87224 
(October 4, 2019), 84 FR 54652 (October 10, 2019) (SR-CBOE-2019-
081). The Exchange believes split-price priority continues to be 
available for cabinet trading on Cboe's trading floor. See also Phlx 
Options 8 Section 33. Accommodation Transactions and Options 8 
Section 25(a)(2) (split-price priority). Per Phlx rulebook, split-
price priority ``applies to the allocation of orders on the Trading 
Floor'' and cabinet trading (accommodation transactions) are 
conducted only by Floor Brokers on Phlx's trading floor. While the 
above exchanges do not explicitly state in their rule text that 
split-price functionality is available for cabinet orders, as 
detailed above, NYSE American/NYSEMKT amended its cabinet trading 
rule text to specifically allow for split-price priority for open 
outcry cabinet trades because other exchanges provide for this 
capability.
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    The Exchange then proposes to specify that option classes 
participating in the Penny Interval Program, pursuant to Rule 7260, are 
not allowed as cabinet orders. Penny Interval classes may already trade 
in minimum increments of $0.01, therefore, the proposed change adds 
clarity to the rule text, and ensures that the cabinet order rule 
accounts for other Exchange Rules that provide for trading in penny 
classes. The Exchange notes the exclusion of penny classes is 
consistent with cabinet order rules on at least one other exchange.\15\
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    \15\ See supra note 4.
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    The Exchange then proposes to add language that Floor Brokers 
representing bids and offers for cabinet trades must first yield 
priority to all existing closing cabinet orders represented on the 
Trading Floor. The Exchange believes including this language makes 
clear that cabinet orders (whether opening or closing) must yield 
priority to any existing closing cabinet orders. For example, if a pre-
existing closing cabinet order is being represented in the trading 
crowd, and another closing cabinet order is submitted, the pre-existing 
closing cabinet order will take priority over the new closing cabinet 
order. The Exchange notes this priority process is followed on at least 
one other options exchange.\16\
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    \16\ See Cboe Rule 5.85(h) (stating that ``[c]abinet orders may 
only execute after yielding priority to all closing cabinet orders 
represented by the trading crowd).
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    Next, as noted above, the Exchange proposes to remove language in 
current subsection (b) which requires Floor Brokers to use designated 
transaction forms to record cabinet transactions and remove the 
language that states Rule 7580(e)(1) does not apply to cabinet orders. 
The Exchange proposes to have cabinet orders systematized by Floor 
Brokers when they record the cabinet orders in their order entry 
mechanisms prior to representation on the Exchange's Trading Floor for 
execution in open outcry. Specifically, cabinet orders, like all other 
QOO Orders, will be subject to the order recordation rule under BOX 
rule 7580(e)(1).\17\ The Exchange believes this will aid Floor Brokers 
in executing cabinet transactions more efficiently and help create an 
electronic audit trail for cabinet orders represented and executed by 
Floor Brokers on the Exchange's Trading Floor.
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    \17\ BOX Rule 7580(e)(1) requires Floor Brokers to 
contemporaneously upon receipt of a single or double-sided orders, 
and prior to the announcement of such order in the trading crowd, 
record specific information of the order onto the Floor Broker's 
order entry mechanism.
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    The Exchange then proposes to remove the specific scenarios laid 
out in current subsections (c) through (e). The Exchange believes not 
removing these examples, which describe the limited circumstances in 
which opening orders may be matched with a cabinet order \18\ would 
create investor confusion as to the types of cabinet orders allowed on 
the BOX Trading Floor. As previously discussed, the Exchange's current 
proposal would allow all cabinet trades (opening or closing) to occur 
via open outcry pursuant to Exchange Rule 7600 series, therefore 
current subsections (c) through (e) would be unnecessary and 
potentially confusing. The Exchange is also proposing to remove the 
definition of ``opening order'' in the current rule because the 
Exchange no longer intends to limit the meaning of the term to contra-
side opening orders as a response to customers. The Exchange's proposal 
allows for initiating and contra-side opening orders.
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    \18\ See supra note 6.
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    Finally, the Exchange proposes to remove the requirement for 
Participants to submit a cabinet transaction form under Rule 7620(f). 
As previously noted, the Exchange is proposing to remove cabinet 
transaction forms in order to have cabinet orders be recorded and 
executed like all other QOO Orders on the Exchange's Trading Floor. 
Therefore, Floor Brokers manually submitting cabinet transaction forms 
to the Exchange will no longer be necessary. The Exchange believes that 
harmonizing cabinet orders and QOO Orders will avoid any potential 
investor confusion by providing consistency in order and trade 
recordation on the Trading Floor.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\19\ in general, and Section 
6(b)(5) of the Act,\20\ in particular the Exchange believes the 
proposed rule change promotes just and equitable principles of trade, 
and by supplying market participants with an additional risk management 
tool will remove impediments to and perfect the mechanism of a free and 
open market and national market system, and in general, protects 
investors and the

[[Page 86613]]

public interest. Additionally, the Exchange believes the proposed rule 
change is consistent with Section 6(b)(5) requirement that the rules of 
an exchange not be designed to permit unfair discrimination between 
market participants because opening cabinet trades are available to all 
market participants and must respect the priority of closing cabinet 
orders. The Exchange believes opening cabinet trades would essentially 
function as an alternative means by which Participants could avoid 
unwanted position exposure. In addition, the Exchange notes that 
opening cabinet trades are not profitable for Participants, but can be 
used to change a Participant's risk profile. The Exchange believes that 
the proposed change is in line with the primary purpose of cabinet 
trading because closing cabinet orders allow market participants to 
close worthless positions--that carry some form of diminutive risk--and 
opening cabinet trades will similarly enable Participants to submit 
orders in not actively traded series to effectively close out 
(synthetically) the risk of current positions. As such, the Exchange 
believes allowing market participants to execute both opening and 
closing cabinet positions is consistent with the Act.
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    \19\ 15 U.S.C. 78f(b).
    \20\ 15 U.S.C. 78f(b)(5).
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    As stated above, the Exchange believes offering opening cabinet 
orders will allow Market Makers (and other market participants) to more 
effectively manage portfolio risk. The Exchange believes enhancing the 
abilities of market participants to reduce risk exposure will remove 
impediments to, and perfect the mechanisms of, a free and open market 
and a national market system by enabling market participants to better 
manage risk and continue to further participate in the market.
    The Exchange believes the proposed rule promotes just and equitable 
principles of trade by accepting opening cabinet orders, only if they 
yield priority to existing closing cabinet orders represented in the 
trading crowd. This order of precedence will ensure that cabinet orders 
remain available for all market participants wishing to effect closing 
transactions, but if no such orders exist, the Exchange will then allow 
for opening cabinet trades to execute. Additionally, the Exchange 
believes the proposed rule change is consistent with the requirement 
that the rules of an exchange not be designed to permit unfair 
discrimination between Participants. Specifically, the proposed rule 
change is not unfairly discriminatory because the priority process 
respects the primacy of closing cabinet orders which the Exchange 
anticipates would be executed by a broader range of market 
participants.
    The Exchange believes amending the rule text to remove the trading 
scenarios \21\ in the current rule text that will no longer apply and 
stating that all cabinet orders will execute in open outcry pursuant to 
Rule 7600 fosters cooperation and coordination with persons engaged in 
facilitating transactions in securities. The Exchange believes 
clarifying that cabinet trades will follow the pre-existing rules of 
QOO Orders adds greater transparency and consistency to the Exchange's 
Trading Floor rules. The Exchange believes that the proposed changes, 
overall, will make the cabinet trading rules easier to follow and 
understand. The Exchange believes removing the requirement for 
Participants to submit manual cabinet transaction forms, and instead 
have Floor Brokers follow the electronic order recordation rule of the 
Exchange will reduce the administrative burden on Floor Brokers and 
therefore removes impediments to and perfects the mechanisms of a free 
and open market. Also, because cabinet trades will be reported and 
processed like all other open outcry trades, market participants will 
not be impacted nor have to take on any additional reporting or 
processing burden. In addition, the Exchange believes that the proposal 
is designed to prevent fraudulent and manipulative acts and practices 
because having an electronic audit trail of all cabinet orders will 
provide a complete and accurate record of cabinet transactions and 
better facilitate regulatory oversight. The Exchange notes at least one 
other options exchange systematizes cabinet orders and allows cabinet 
orders to execute pursuant to open outcry rules.\22\
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    \21\ See supra note 6.
    \22\ See supra note 4.
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    The Exchange believes allowing for split-pricing priority 
provisions (pursuant to Rule 7600) to apply to cabinet trades promotes 
just and equitable principles of trade, and removes impediments to and 
perfects the mechanisms of a free and open market and national market 
system because it will align the Exchange's Rules with the rules and 
trading practices of other options exchanges that currently conduct 
cabinet trading on their respective trading floors.\23\ The Exchange 
believes providing market participants the ability to have split-price 
priority when trading cabinet orders will help facilitate the trading 
of options positions that are worthless or not actively traded. The 
Exchange believes the proposal is consistent with the protection of 
investors and the public interest because allowing for split-price 
priority for cabinet trading should lead to more aggressive quoting by 
Floor Participants, which in turn may lead to better executions for all 
market participants. Specifically, a Floor Participant might be willing 
to trade at a better price for a portion of an order if they were 
assured of trading with the balance of the order at the next best price 
increment. As a result, Floor Brokers representing orders in the 
trading crowd might receive better-priced executions.
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    \23\ See supra note 14.
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    Lastly, the Exchange believes permitting opening cabinet 
transactions that yield priority to existing closing cabinet orders 
aligns the Exchange's rule with at least two other exchanges with 
trading floors.\24\ Therefore, the Exchange believes this proposal 
offers more consistency with floor trading across market centers which 
helps avoid potential investor confusion, thereby removing impediments 
to and perfecting the mechanisms of a free and open national market 
system and protecting investors and the public interest.
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    \24\ See supra note 4 and NYSEArca Rule 6.80-O(b)(5) (noting 
bids or offers on orders to open or close for the accounts of Market 
Makers, customers or firms may be made at $1 per option contract, 
but such orders must yield to all orders in the cabinet).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule changes will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. As indicated above, the 
Exchange notes that the rule is being proposed as a competitive 
response to the rules of another exchange.\25\ The Exchange believes 
that allowing for additional liquidations at $1 per option contract 
would allow market participants to better manage risk and hedge 
unwanted exposure. The Exchange believes this promotes competition 
amongst exchanges because market participants will have an additional 
venue in which they can execute opening cabinet order transactions. In 
addition, the Exchange believes allowing opening cabinet executions 
from Market Makers will provide Market Makers with an additional risk 
management tool while trading on BOX, and encourage them to direct more 
general order flow to the Exchange, which may ultimately benefit all 
Participants. Furthermore, the Exchange does not believe that the 
proposed rule change will impose any

[[Page 86614]]

burden on intramarket competition because the proposal simply offers an 
additional way for all market participants to synthetically liquidate 
unwanted risk exposure, and respects the priority of closing cabinet 
orders. In addition, the Exchange does not believe the proposed rule 
change will impose any burden on intramarket competition because the 
proposed cabinet orders will be available to all market participants to 
execute in open outcry in the same manner as they are able to execute 
any other QOO Orders. Furthermore, the Exchange believes that allowing 
for split-pricing priority to apply to cabinet trades is pro-
competitive as it will allow the Exchange to offer its Participants 
pricing abilities which are currently available on competing exchanges 
\26\ As such, 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.
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    \25\ See supra note 4.
    \26\ See supra note 14.
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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-2020-38 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-2020-38. 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 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. 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-2020-38 and should be submitted on 
or before January 21, 2021.
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    \27\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\27\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2020-28890 Filed 12-29-20; 8:45 am]
BILLING CODE 8011-01-P