Document ID: SEC-2014-0660-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange LLC
Posted Date: 2014-04-22T04:00Z

[Federal Register Volume 79, Number 77 (Tuesday, April 22, 2014)]
[Notices]
[Pages 22561-22563]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-09077]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71953; File No. SR-BOX-2014-14]

Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Rule 7130 (Execution and Price/Time Priority) To Include Public 
Customer Bid/Ask Volume Information in BOX's Proprietary High Speed 
Vendor Feed (``HSVF'')

April 16, 2014.
    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 April 4, 2014, BOX Options Exchange LLC (the ``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 7130 (Execution and Price/Time 
Priority) to include Public Customer bid/ask volume information in 
BOX's proprietary High Speed Vendor Feed (``HSVF''). 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 self-regulatory organization 
included statements concerning the purpose of, and basis for, the 
proposed rule change and discussed any comments it received on the 
proposed rule change. The text of these statements may be examined at 
the places specified in Item IV below. The self-regulatory organization 
has prepared summaries, set forth in Sections A, B, and C below, of the 
most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The purpose of the proposed rule change is to amend Rule 7130 
(a)(2) (Execution and Price/Time Priority) to specify the addition of 
Public Customer bid/ask volume information in the BOX High Speed Vendor 
Feed (``HSVF''). Specifically, the new field will show Public Customer 
bid/ask volume at the best limit. The HSVF is a proprietary product 
that contains: (i) Trades and trade cancelation information; (ii) best-
ranked price level to buy and the best-ranked price level to sell; 
(iii) instrument summaries (including information such as high, low, 
and last trade price and traded volume); (iv) the five best limit 
prices and the best-ranked Legging Order \3\ (if any), for each option 
instrument, and the five best limit prices and the best-ranked Implied 
Order \4\ (if any), for each Complex Order Strategy; (v) request for 
Quote

[[Page 22562]]

messages \5\; (vi) PIP Order, COPIP Order, Improvement Order and Block 
Trade Order (Facilitation and Solicitation) information \6\; (vii) 
orders exposed at NBBO \7\ and Complex Orders exposed \8\; (viii) 
instrument dictionary (e.g., strike price, expiration date, underlying 
symbol, price threshold, and minimum trading increment for instruments 
traded on BOX); (ix) options class and instrument status change notices 
(e.g., whether an instrument or class is in pre-opening, continuous 
trading, closed, halted, or prohibited from trading); and (x) options 
class opening time. The HSVF is available to all market participants at 
no cost.
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    \3\ As set forth in Exchange Rule 7240(c)(1).
    \4\ As set forth in Exchange Rule 7240(d)(1).
    \5\ See Exchange Rules 100(a)(57), 7070(h) and 8050.
    \6\ As set forth in Exchange Rules 7150, 7245, and 7270, 
respectively.
    \7\ As set forth in Exchange Rules 7130(b)(3) and 8040(d)(6), 
respectively.
    \8\ As set forth in Exchange Rule 7240(b)(3)(iii)(B).
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    The HSVF provides data to enhance the ability of subscribers to 
analyze market conditions and to create and test trading models and 
analytical strategies. The Exchange believes that the HSVF is a 
valuable tool that can be used to gain comprehensive insight into the 
trading activity in a particular option series. The addition of Public 
Customer bid/ask volume information will further increase the value of 
this tool by allowing market participants to better gauge Public 
Customer interest. If no Public Customer orders are present at the best 
limit, then the bid/ask volume will show 0 (zero). The new field will 
show the bid/ask volume at the best limit for both regular options and 
strategy instruments.
 2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\9\ in general, and Section 
6(b)(5) of the Act,\10\ in particular, in that the HSVF is designed to 
promote just and equitable principles of trade, remove impediments to 
and perfect the mechanism of a free and open market and a national 
market system, and, in general protect investors and the public 
interest, by including additional information in BOX's market data 
product. In particular, the HSVF product will now include Public 
Customer bid/ask volume information. The Exchange believes provides for 
a more free and open market [sic]. Additionally, this proposed change 
will enhance subscribers' ability to make more informed and timely 
trading decisions. As such, BOX believes the proposed rule change is in 
the public interest, and therefore, consistent with the Act.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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    In adopting Regulation NMS, the Commission granted self-regulatory 
organizations and broker-dealers increased authority and flexibility to 
offer new and unique market data to the public. It was believed that 
this authority would expand the amount of data available to consumers, 
and also spur innovation and competition for the provision of market 
data. The Exchange believes that the proposal is in keeping with those 
principles by promoting increased transparency through the 
dissemination of more useful proprietary data.
    Additionally, the Exchange chooses to make the data available as 
proposed in order to improve market quality, to attract order flow, and 
to increase transparency. The Exchange will continue making the data 
available until such time as the Exchange changes its rule.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change would allow the Exchange to disseminate 
additional information in its propriety market data product, the HSVF. 
This enhancement to the HSVF will give market participants greater 
information on which to base their trading strategies. 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.

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

    The proposed rule change is effective upon filing pursuant to 
Section 19(b)(3)(A) of the Act \11\ and paragraph (f)(6) of Rule 19b-4 
thereunder,\12\ in that the proposed rule change: (i) Does not 
significantly affect the protection of investors or the public 
interest; (ii) does not impose any significant burden on competition; 
and (iii) does not become operative for 30 days after the date of the 
filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest; 
provided the self-regulatory organization has given the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by the Commission.\13\
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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 240.19b-4(f)(6).
    \13\ The Exchange has fulfilled this requirement.
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of the purposes of the Act. If the Commission 
takes such action, the Commission 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-2014-14 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-2014-14. 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

[[Page 22563]]

available for Web site viewing and printing in the Commission's Public 
Reference Room, on official business days between the hours of 10:00 
a.m. and 3:00 p.m., located at 100 F Street NE., Washington, DC 20549. 
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-2014-14 and should be submitted on 
or before May 13, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Kevin M. O'Neill,
Deputy Secretary.
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    \14\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 2014-09077 Filed 4-21-14; 8:45 am]
BILLING CODE 8011-01-P