Document ID: SEC-2014-0255-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange, LLC
Posted Date: 2014-02-11T05:00Z

[Federal Register Volume 79, Number 28 (Tuesday, February 11, 2014)]
[Notices]
[Pages 8212-8213]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-02873]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71480; File No. SR-BOX-2014-07]

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

February 5, 2014.
    Pursuant to Section 19(b)(1) under the Securities Exchange Act of 
1934 (the ``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on January 23, 2014, 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 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 on 
the BOX Market LLC (``BOX'') options facility to remove the reference 
to the Nasdaq 100 Index (NDX) as well as to modify language in the 
footnotes. 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, Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule for trading on BOX 
to remove the reference to the Nasdaq 100 Index (NDX) and to modify 
language in the footnotes.
    Because the Exchange has delisted the Nasdaq 100 Index (NDX),\5\ 
the Exchange proposes to remove the reference to NDX from the BOX Fee 
Schedule. Currently, Section I Exchange Fees of the BOX Fee Schedule 
provides for a surcharge to be applied to options on any index traded 
on BOX; which includes a $0.22 per contract surcharge for options on 
NDX. The Exchange has since delisted options on NDX and they are no 
longer traded on BOX. As such, no related surcharge will apply, and the 
Exchange is proposing to remove the reference to the BOX Fee Schedule.
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    \5\ See Securities Exchange Act Release No. 71084 (December 16, 
2013), 78 FR 77185 (December 20, 2013) (SR-BOX-2013-58) (Notice of 
Filing and Immediate Effectiveness).
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    In addition, the Exchange is proposing to amend the language in 
footnotes 6 and 7 in Sections I.A. and I.B. of the Fee Schedule. The 
Exchange recently added these footnotes to permit the Exchange to 
adjust the average daily volume calculation for any trading day on 
which the Exchange is closed for trading due to an early closing or a 
market-wide trading halt.\6\ The Exchange proposes to modify the 
language in these footnotes to state ``For purposes of calculating 
monthly ADV, BOX will count as a half day any day that the market 
closes early for a holiday observance.'' The Exchange believes this 
proposed change will reduce investor confusion by clarifying when the 
Exchange will make adjustments to the monthly Average Daily Volume 
(``ADV'') calculation.
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    \6\ See Securities Exchange Act Release No. 71025 (December 6, 
2013), 78 FR 75644 (December 12, 2013) (SR-BOX-2013-55) (Notice of 
Filing and Immediate Effectiveness).
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    Specifically, all days where the Exchange closes early for holiday 
observance will be counted as a half day in the monthly ADV 
calculation. While Participants are always aware in advance of early 
close days, these are typically low volume days and the Exchange 
believes counting these days as a full day for purposes of the ADV 
calculation would not be fair to Participants. This will clarify that 
the Exchange will not make any adjustments to the ADV calculation on 
days where trading in all securities was halted for a period of time. 
While certain exchanges remove these days from their ADV 
calculations,\7\ the Exchange believes that the timing and impact of 
trading halts can vary substantially, and removing these days entirely 
from the ADV calculation is not always appropriate. Since trading halts 
occur very rarely, the Exchange believes it is reasonable to always 
include these days in the ADV calculation and that doing so will reduce 
investor confusion about what instances qualify for the ADV adjustment.
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    \7\ NASDAQ OMX PHLX, LLC (``PHLX''), NASDAQ Options Market 
(``NOM'') and the International Securities Exchange, LLC (``ISE'') 
all exclude days from their respective ADV calculations if there a 
trading halt in all securities or the exchange is honoring a market-
wide trading halt declared by another market.
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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,\8\ 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. In particular, this proposed change removes from the BOX 
Fee Schedule a reference to a fee that is no longer applicable since 
options on NDX have been delisted and are no longer traded on BOX. 
Additionally, the proposed modification to the language in footnotes 6 
and 7 will provide greater clarity to the Exchange's procedures for 
making adjustments in calculating monthly ADV on days when the market

[[Page 8213]]

closes early for holiday observances thereby reducing investor 
confusion.
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    \8\ 15 U.S.C. 78f(b)(4) and (5).
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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 proposed changes are not 
designed to address any competitive issue but rather would remove the 
reference to NDX that is no longer applicable because options on NDX 
have been delisted and are no longer traded on BOX and would provide 
clarification to the Exchange's procedures for making adjustments in 
calculating monthly ADV on days when the market closes early for 
holiday observances.

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 \9\ and Rule 19b-4(f)(2) 
thereunder,\10\ because it establishes or changes a due, or fee.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 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-2014-07 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BOX-2014-07. 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-2014-07 and should be 
submitted on or before March 4, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-02873 Filed 2-10-14; 8:45 am]
BILLING CODE 8011-01-P