Document ID: SEC-2015-0250-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange LLC
Posted Date: 2015-02-10T05:00Z

[Federal Register Volume 80, Number 27 (Tuesday, February 10, 2015)]
[Notices]
[Pages 7512-7514]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-02642]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74201; File No. SR-BOX-2015-08]

Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change 
Relating to the Options Regulatory Fee

February 4, 2015.
    Pursuant to Section 19(b)(1) under the Securities Exchange Act of 
1934 (the

[[Page 7513]]

``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 28, 2015, BOX Options Exchange LLC (the ``Exchange'') filed 
with the Securities and Exchange Commission (the ``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.
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    \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).
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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 
increase the ORF from $0.0030 per contract to $0.0038 per contract. 
While changes to the fee schedule pursuant to this proposal will be 
effective upon filing, the changes will become operative on February 2, 
2015. 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 to increase the ORF 
from $0.0030 per contract to $0.0038 per contract. The Exchange 
proposes to increase the ORF in light of increased regulatory costs and 
expected volume levels in 2015. The filing is based on the 
substantially similar filings filed by Miami International Securities 
Exchange, LLC. The proposed fee change would be operative on February 
2, 2015.
    The Exchange proposes to increase the ORF from $0.0030 per contract 
to $0.0038 per contract in light of increased regulatory costs and 
expected volume levels in 2015. The ORF is assessed by the Exchange on 
each Participant for all options transactions executed or cleared by 
the Participant that are cleared by The Options Clearing Corporation 
(``OCC'') in the customer range (i.e., transactions that clear in the 
customer account of the Participant's clearing firm at OCC) regardless 
of the exchange on which the transaction occurs. The fee is collected 
indirectly from Participants through their clearing firms by OCC on 
behalf of the Exchange. The dues and fees paid by Participants go into 
the general funds of the Exchange, a portion of which is used to help 
pay the costs of regulation. The ORF is designed to recover a material 
portion of the costs to the Exchange of the supervision and regulation 
of Participant customer options business, including performing routine 
surveillances, investigations, examinations, financial monitoring, as 
well as policy, rulemaking, interpretive and enforcement activities. 
The Exchange believes that revenue generated from the ORF, when 
combined with all of the Exchange's other regulatory fees and fines, 
will cover a material portion, but not all, of the Exchange's 
regulatory costs. The Exchange notes that its regulatory 
responsibilities with respect to Participant compliance with options 
sales practice rules have largely been allocated to FINRA under a 17d-2 
agreement. The ORF is not designed to cover the cost of that options 
sales practice regulation. The Exchange will continue to monitor the 
amount of revenue collected from the ORF to ensure that it, in 
combination with its other regulatory fees and fines, does not exceed 
the Exchange's total regulatory costs. If the Exchange determines 
regulatory revenues exceed regulatory costs, the Exchange will adjust 
the ORF by submitting a fee change filing to the Commission, as set 
forth in the BOX Fee Schedule.
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, 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.
    The Exchange believes the proposed fee change is reasonable because 
it would help the Exchange offset increased regulatory expenses, but 
would not result in total regulatory revenue exceeding total regulatory 
costs. Moreover, the Exchange believes the ORF ensures fairness by 
assessing higher fees to those Participants that require more Exchange 
regulatory services based on the amount of customer options business 
they conduct. Regulating customer trading activity is much more labor 
intensive and requires greater expenditure of human and technical 
resources than regulating non-customer trading activity, which tends to 
be more automated and less labor intensive. As a result, the costs 
associated with administering the customer component of the Exchange's 
overall regulatory program are materially higher than the costs 
associated with administering the noncustomer component--Participant 
proprietary transactions) of its regulatory program. The Exchange 
believes that the proposed change is equitable and not unfairly 
discriminatory because it will apply in the same manner to all 
Participants that are subject to the ORF.

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. Because competitors are free 
to modify their own fees and credits in response, and because market 
participants may readily adjust their trading practices, the Exchange 
believes that the degree to which fee or credit changes in this market 
may impose any burden on competition is extremely limited. As a result 
of all of these considerations, the Exchange does not believe that the 
proposed change will impair the ability of Participants or competing 
order execution venues to maintain their competitive standing in the 
financial markets.

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.

[[Page 7514]]

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 \5\ and Rule 19b-4(f)(2) 
thereunder,\6\ because it establishes or changes a due, or fee.
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    \5\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \6\ 17 CFR 240.19b-4(f)(2).
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    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-2015-08 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-2015-08. 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-2015-08, and should be 
submitted on or before March 3, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2015-02642 Filed 2-9-15; 8:45 am]
BILLING CODE 8011-01-P