Document ID: SEC-2016-0743-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange, LLC
Posted Date: 2016-04-28T04:00Z

[Federal Register Volume 81, Number 82 (Thursday, April 28, 2016)]
[Notices]
[Pages 25455-25456]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-09902]

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77695; File No. SR-BOX-2016-20]

Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend the Fee Schedule on the BOX Market LLC (``BOX'') Options Facility

April 22, 2016.
    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 April 21, 2016, 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.
---------------------------------------------------------------------------

    \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).
---------------------------------------------------------------------------

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 BOX Volume Rebate 
(``BVR'') in Section I.B.2 of the Fee Schedule on the BOX Market LLC 
(``BOX'') options facility. The text of the proposed rule change is 
available from the principal office of the Exchange, at the 
Commission's Public Reference Room and also on the Exchange's Internet 
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. 
Specifically, the Exchange proposes to amend the BOX Volume Rebate 
(``BVR'') in Section I.B.2 of the Fee Schedule.
    Under the current BVR, the Exchange offers a tiered per contract 
rebate for all PIP Orders and COPIP Orders of 100 contracts and under 
that do not trade solely with their contra order. These PIP and COPIP 
executions are awarded a per contract rebate calculated on a monthly 
basis by totaling the Participant's PIP and COPIP volume submitted to 
BOX, relative to the total national Customer volume in multiply-listed 
options classes.
    The current per contract rebate for Participants in PIP and COPIP 
Transactions under the BVR is:

------------------------------------------------------------------------
                   Percentage thresholds     Per contract rebate (all
                    of national customer          account types)
       Tier         volume in multiply-  -------------------------------
                       listed options
                     classes (monthly)          PIP            COPIP
------------------------------------------------------------------------
1................  0.000% to 0.159%.....         ($0.00)         ($0.00)
2................  0.160 to 0.339.......          (0.04)          (0.02)
3................  0.340 to 0.99........          (0.11)          (0.04)
4................  1.00 and Above.......          (0.14)          (0.06)
------------------------------------------------------------------------

[[Page 25456]]

    The Exchange proposes to introduce an additional rebate in the BVR. 
Specifically, PIP Orders and COPIP Orders of 100 and under contracts 
that trade solely with their contra order will receive a $0.05 per 
contract rebate, regardless of tier.
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,\5\ 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.
---------------------------------------------------------------------------

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

    The Exchange believes the proposed amendment to the BVR is 
reasonable, equitable and non-discriminatory. The BVR was adopted to 
attract Public Customer order flow to the Exchange by offering these 
Participants incentives to submit their PIP and COPIP Orders to the 
Exchange. The Exchange believes it is reasonable and appropriate to 
adjust the BVR to provide additional incentives for Public Customers, 
which will result in greater liquidity and ultimately benefit all 
Participants trading on the Exchange.
    The Exchange believes it is reasonable, equitable and non-
discriminatory to introduce a flat $0.05 rebate in the BVR for PIP 
Orders and COPIP Orders of 100 and under contracts that trade solely 
with their contra order. The Exchange recently amended the BVR to 
restrict the tiered per contract rebates in the BVR to only those PIP 
and COPIP Orders of 100 and under contracts that do not trade solely 
with their contra order.\6\ The Exchange now believes it is reasonable 
to instead give those orders a flat $0.05 rebate, regardless of tier. 
The BVR is intended to incentivize Participants to direct Customer 
order flow to the Exchange, and while the Exchange believes that the 
potentially higher BVR rebate tiers are not necessary for internalized 
PIP Orders that only trade against their contra order, a flat $0.05 
rebate is the appropriate incentive for these orders. The Exchange also 
believes that a flat $0.05 rebate for internalized COPIP Orders that 
only trade against their contra order is a reasonable incentive.
---------------------------------------------------------------------------

    \6\ See SR-BOX-2106-17 [sic].
---------------------------------------------------------------------------

    Further, the Exchange believes the proposed rebate is equitable and 
not unfairly discriminatory because Participants are eligible to 
receive a rebate provided they meet the order type requirements.

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 believes the 
proposed fee change is reasonably designed to enhance competition in 
BOX transactions, particularly auction transactions.
    The proposed rule change amends the BVR to provide a flat rebate 
for PIP or COPIP Order [sic] that trade solely with their contra order. 
The Exchange does not believe that the proposed change burdens 
competition and will instead help promote competition by providing 
additional incentives for market participants to submit customer order 
flow to BOX and thus, create a greater opportunity for retail customers 
to receive additional price improvement.

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 \7\ and Rule 19b-4(f)(2) 
thereunder,\8\ because it establishes or changes a due, or fee.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

    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-2016-20 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-2016-20. 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-2016-20, and should be 
submitted on or before May 19, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Brent J. Fields,
Secretary.
[FR Doc. 2016-09902 Filed 4-27-16; 8:45 am]
BILLING CODE 8011-01-P