Document ID: SEC-2018-0899-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange LLC
Posted Date: 2018-06-14T04:00Z

[Federal Register Volume 83, Number 115 (Thursday, June 14, 2018)]
[Notices]
[Pages 27807-27812]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-12751]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-83396; File No. SR-BOX-2018-21]

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 
To Amend Fees and Rebates for Non-Auction Transactions

June 8, 2018.
    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 May 31, 2018, 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

[[Page 27808]]

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 on 
the BOX Market LLC (``BOX'') options facility. While changes to the fee 
schedule pursuant to this proposal will be effective upon filing, the 
changes will become operative on June 1, 2018. 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://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 make changes to Section I. (Electronic 
Transaction Fees).
Exchange Fees for Non-Auction Transactions
    The Exchange proposes to adjust certain fees for Non-Auction 
Transactions. Currently, for all non-auction transactions, fees and 
credits are assessed depending upon three factors: (i) The account type 
of the Participant submitting the order; (ii) whether the Participant 
is a liquidity provider or liquidity taker; and (iii) the account type 
of the contra party. Non-Auction Transactions in Penny Pilot Classes 
are assessed different fees or credits than Non-Auction Transactions in 
Non-Penny Pilot Classes.
    The current fees for Non-Auction Transactions are:

----------------------------------------------------------------------------------------------------------------
                                                                 Penny Pilot Classes     Non-Penny Pilot Classes
            Account type                   Contra party      ---------------------------------------------------
                                                               Maker fee    Taker fee    Maker fee    Taker fee
----------------------------------------------------------------------------------------------------------------
Public Customer.....................  Public Customer.......        $0.05        $0.05        $0.05        $0.05
                                      Professional Customer/         0.05         0.05         0.05         0.05
                                       Broker Dealer.
                                      Market Maker..........         0.05         0.05         0.05         0.05
Professional Customer or Broker       Public Customer.......         0.60         0.45         0.95         0.85
 Dealer.                              Professional Customer/         0.05         0.45         0.05         0.60
                                       Broker Dealer.
                                      Market Maker..........         0.05         0.45         0.05         0.60
Market Maker........................  Public Customer.......         0.27         0.43         0.65         0.80
                                      Professional Customer/         0.00         0.29         0.00         0.40
                                       Broker Dealer.
                                      Market Maker..........         0.00         0.29         0.00         0.40
----------------------------------------------------------------------------------------------------------------

    First, the Exchange proposes to remove the fees assessed for Public 
Customers that make or take liquidity against Public Customers in Penny 
Pilot and Non-Penny Pilot Classes. Next, the Exchange proposes to 
eliminate the fees assessed to Public Customers that make liquidity 
against Professional Customers/Broker Dealers and Market Makers in 
Penny Pilot and Non-Penny Pilot Classes. Lastly, the Exchange proposes 
to assess a $0.20 credit for Public Customers that take liquidity from 
Professional Customers/Broker Dealers and Market Makers in Penny Pilot 
Classes and a $0.50 credit for Public Customers that take liquidity 
from Professional Customers/Broker Dealers and Market Makers in Non-
Penny Pilot Classes.
    The Exchange proposes to adjust the fees assessed for Professional 
Customers and Broker Dealers. In Penny Pilot Classes, the Exchange 
proposes to adjust the fees assessed for Professional Customers and 
Broker Dealers that that take liquidity from all other Participants. 
Specifically, the Exchange proposes to increase the fee assessed to 
Professional Customers and Broker Dealers that take liquidity from 
Public Customers, Professional Customers/Broker Dealers and Market 
Makers to $0.50 from $0.45 in Penny Pilot Classes. Additionally, the 
Exchange proposes to increase the fees assessed for Professional 
Customers and Broker Dealers making liquidity against Professional 
Customers and Broker Dealers and Market Makers in Penny Pilot Classes 
to $0.15 from $0.05. For Non-Penny Pilot Classes, the Exchange proposes 
to increase the fees assessed for Professional Customers and Broker 
Dealers making liquidity against Non-Public Customers to $0.15 from 
$0.05. The Exchange also proposes to increase the fees assessed for 
Professional Customers and Broker Dealers taking liquidity from Public 
Customers to $0.95 from $0.85 in Non-Penny Pilot Classes. Lastly, with 
regard to Professional Customers/Broker Dealers taking liquidity from 
Professional Customers/Broker Dealers and Market Makers in Non-Penny 
Pilot Classes, the Exchange proposes to increase the fees assessed to 
$0.85 from $0.60.
    The Exchange then proposes to adjust the fees assessed for Market 
Makers in Non-Auction Transactions. First, the Exchange proposes to 
increase the fees assessed on Market Makers making liquidity against a 
Public Customer to $0.50 from $0.27 in Penny Pilot Classes. With regard 
to Market Makers taking liquidity against Public Customers in Penny 
Pilot Classes, the Exchange proposes to increase the fee to $0.50 from 
$0.43. Further, the Exchange proposes to increase the fee for Market 
Makers taking liquidity against Professional Customers and Broker 
Dealers and Market Makers in Penny Pilot Classes to $0.50 from $0.29. 
Lastly, the Exchange proposes to adjust the fees assessed to Market 
Makers in Non-Penny Pilot Classes. Specifically, the

[[Page 27809]]

Exchange proposes to increase the fee assessed to a Market Maker when 
making liquidity from a Public Customer in Non-Penny Pilot Classes to 
$0.95 from $0.65. In Non-Penny Pilot Classes, the Exchange proposes to 
increase the fee assessed to Market Makers taking liquidity from a 
Public Customer to $0.95 from $0.80. Lastly, the Exchange proposes to 
increase the fees assessed to Market Makers taking liquidity from 
Professional Customers/Broker Dealers and Market Makers in Non-Penny 
Pilot Classes to $0.75 from $0.40.
    The fees for Non-Auction Transactions will be as follows:

----------------------------------------------------------------------------------------------------------------
                                                                 Penny Pilot Classes     Non-Penny Pilot Classes
            Account type                   Contra party      ---------------------------------------------------
                                                               Maker fee    Taker fee    Maker fee    Taker fee
----------------------------------------------------------------------------------------------------------------
Public Customer.....................  Public Customer.......        $0.00        $0.00        $0.00        $0.00
                                      Professional Customer/         0.00       (0.20)         0.00       (0.50)
                                       Broker Dealer.
                                      Market Maker..........         0.00       (0.20)         0.00       (0.50)
Professional Customer or Broker       Public Customer.......         0.60         0.50         0.95         0.95
 Dealer                               Professional Customer/         0.15         0.50         0.15         0.85
                                       Broker Dealer.
                                      Market Maker..........         0.15         0.50         0.15         0.85
Market Maker........................  Public Customer.......         0.50         0.50         0.95         0.95
                                      Professional Customer/         0.00         0.50         0.00         0.75
                                       Broker Dealer.
                                      Market Maker..........         0.00         0.50         0.00         0.75
----------------------------------------------------------------------------------------------------------------

Tiered Volume Rebate for Non-Auction Transactions
    The Exchange proposes to amend Section I.A.1. of the BOX Fee 
Schedule, Tiered Volume Rebate for Non-Auction Transactions. 
Specifically, the Exchange proposes to adjust the rebates in the Tiered 
Volume Rebate for Public Customers in Non Auction Transactions. The 
current Tiered Volume Rebate for Public Customers in Non-Auction 
Transactions is as follows:

----------------------------------------------------------------------------------------------------------------
                                                                              Per contract rebate
                                 Percentage thresholds of    ---------------------------------------------------
            Tier                national customer volume in      Penny Pilot Classes     Non-Penny Pilot Classes
                                 multiply- listed options    ---------------------------------------------------
                                     classes (monthly)           Maker        Taker        Maker        Taker
----------------------------------------------------------------------------------------------------------------
1...........................  0.000-0.129...................        $0.00        $0.00        $0.00        $0.00
2...........................  0.130-0.339...................       (0.05)       (0.05)       (0.20)       (0.20)
3...........................  0.340-0.549...................       (0.15)       (0.15)       (0.30)       (0.30)
4...........................  0.550 and Above...............       (0.25)       (0.25)       (0.50)       (0.50)
----------------------------------------------------------------------------------------------------------------

    The Exchange proposes to adjust certain maker and taker rebates in 
Tiers 2 through 4 of the Tiered Volume Rebate structure for Public 
Customers in both Penny Pilot Classes and Non-Penny Pilot Classes. The 
new per contract rebate for Public Customers in Non-Auction 
Transactions as set forth in Section I.A.1. of the BOX Fee Schedule 
will be as follows:

----------------------------------------------------------------------------------------------------------------
                                                                              Per contract rebate
                                 Percentage thresholds of    ---------------------------------------------------
            Tier                national customer volume in      Penny Pilot Classes     Non-Penny Pilot Classes
                                 multiply- listed options    ---------------------------------------------------
                                     classes (monthly)           Maker        Taker        Maker        Taker
----------------------------------------------------------------------------------------------------------------
1...........................  0.000-0.129...................        $0.00        $0.00        $0.00        $0.00
2...........................  0.130-0.339...................       (0.05)       (0.15)       (0.15)       (0.27)
3...........................  0.340-0.549...................       (0.10)       (0.20)       (0.30)       (0.32)
4...........................  0.550 and Above...............       (0.27)       (0.27)       (0.60)       (0.40)
----------------------------------------------------------------------------------------------------------------

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. The proposed changes will allow the Exchange to be 
competitive with other exchanges and to apply fees, credits and rebates 
in a manner that is equitable among all BOX Participants. Further, the 
Exchange operates within a highly competitive market in which market 
participants can readily direct order flow to any other competing 
exchange if they determine fees at a particular exchange to be 
excessive.
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    \5\ 15 U.S.C. 78f(b)(4) and (5).
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Non-Auction Transactions
    The Exchange believes it is equitable, reasonable and not unfairly 
discriminatory to assess fees according to the account type of the 
Participant originating the order and the contra party. This fee 
structure has been in place on the Exchange since 2014 and the Exchange 
is simply adjusting certain fees within the structure.\6\ The result of 
this structure is that a Participant does not know the fee it will be 
charged when submitting certain orders. Therefore, the Participant must 
recognize that it could be charged the

[[Page 27810]]

highest applicable fee on the Exchange's schedule, which may, instead, 
be lowered depending upon how the order interacts.
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    \6\ See Securities Exchange Release No. 73547 (November 6, 
2014), 79 FR 67520 (November 13, 2014) (Notice of Filing and 
Immediate Effectiveness SR-BOX-2014-25).
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    The Exchange believes removing non-auction transaction fees for 
Public Customers making or taking liquidity against Public Customers in 
Penny and Non-Penny Pilot Classes, as well as Public Customers making 
liquidity against Professional Customers, Broker Dealers and Market 
Makers is reasonable, equitable and not unfairly discriminatory. 
Further, the Exchange believes that providing a $0.20 and $0.50 credit 
to Public Customers that take liquidity from Professional Customers, 
Broker Dealers and Market Makers in Penny Pilot Classes and Non-Penny 
Pilot Classes, respectively, is also reasonable, equitable and not 
unfairly discriminatory. The Exchange notes that it has either not 
charged or provided a credit to Public Customers for Non-Auction 
Transactions on BOX in the past.\7\ Further, the Exchange believes 
providing a credit or charging no fee to Public Customers for all Non-
Auction Transactions is equitable and not unfairly discriminatory. The 
securities markets generally, and BOX in particular, have historically 
aimed to improve markets for investors and develop various features 
within the market structure for Public Customer benefit. Accordingly, 
the Exchange believes that charging no fee or providing a credit for 
Public Customers is appropriate and not unfairly discriminatory. Public 
Customers are less sophisticated than other Participants and the credit 
will help to attract a high level of Public Customer order flow to the 
BOX Book and create liquidity, which the Exchange believes will 
ultimately benefit all Participants trading on BOX.
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    \7\ Id. See also Securities Exchange Act Release No. 75350 (July 
1, 2015), 80 FR 39169 (July 8, 2015) (SR-BOX-2015-24).
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    Finally, the Exchange believes it is reasonable, equitable and not 
unfairly discriminatory to give Public Customers a credit (or charge no 
fee) when their orders execute against a non-Public Customer and, 
accordingly, charge non-Public Customers a higher fee when their orders 
execute against a Public Customer. As stated above, the Exchange aims 
to improve markets by developing features for the benefit of its Public 
Customers. Similar to the payment for order flow and other pricing 
models that have been adopted by the Exchange and other exchanges to 
attract Public Customer order flow, the Exchange increases fees to non-
Public Customers in order to provide incentives for Public Customers. 
Further, the Exchange believes that providing a higher credit in Non-
Penny Pilot Classes is reasonable. As discussed herein, Non-Penny Pilot 
Classes are traded less actively and the Exchange believes that 
providing this higher credit in Non-Penny Pilot Classes will provide 
incentive for Public Customers to trade in these classes. The Exchange 
believes that providing incentives for Non-Auction Transactions by 
Public Customers is reasonable and, ultimately, will benefit all 
Participants trading on the Exchange by attracting Public Customer 
order flow.
    The Exchange believes that the proposed fees for Professional 
Customers and Broker Dealers in Non-Auction Transactions are 
reasonable. Under the proposed fee structure, a Professional Customer 
or Broker Dealer making liquidity and interacting with a Professional 
Customer, Broker Dealer or Market Marker will now be charged a fee of 
$0.15 in both Penny and Non-Penny Pilot Classes. If the Professional 
Customer or Broker Dealer is instead taking liquidity in the Penny 
Pilot, it will be charged $0.50 against any other Participant. If the 
Professional Customer or Broker Dealer is taking liquidity in the Non-
Penny Pilot, it will be charged $0.95 if it interacts with a Public 
Customer and $0.85 if it interacts with a Professional Customer/Broker 
Dealer or Market Maker. The Exchange believes that the proposed fees 
are reasonable as they are in line with the current fees assessed by 
another competing exchange.\8\
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    \8\ See Nasdaq ISE, LLC (``ISE'') Fee Schedule. On ISE, 
Professional Customers and Broker Dealers are charged $0.10 for 
making liquidity in Penny Pilot Classes and charged $0.46 for taking 
liquidity in Penny Pilot Classes. See also NYSE Arca Inc (``Arca'') 
Fee Schedule. Arca charges Professional Customers and Broker Dealers 
$1.10 for taking liquidity in Non-Penny Pilot Classes.
---------------------------------------------------------------------------

    The Exchange believes that charging Professional Customers and 
Broker Dealers higher fees than Public Customers for their Non-Auction 
Transactions is equitable and not unfairly discriminatory. Professional 
Customers, while Public Customers by virtue of not being Broker 
Dealers, generally engage in trading activity more similar to Broker 
Dealer proprietary trading accounts. The Exchange believes that the 
higher level of trading activity from these Participants will draw a 
greater amount of BOX system resources; the Exchange aims to recover 
its costs by assessing Professional Customers and Broker Dealers higher 
fees for transactions.
    The Exchange believes that the proposed fees for Market Makers in 
Non-Auction Transactions are reasonable. With the proposed fee changes, 
a Market Maker making liquidity will now be charged a higher fee of 
$0.50 (Penny Pilot) and $0.95 (Non-Penny Pilot) for interacting with a 
Public Customer. Further, a Market Maker taking liquidity against a 
Public Customer will now be charged $0.50 in Penny Pilot Classes and 
$0.95 in Non-Penny Pilot Classes. If a Market Maker is taking liquidity 
in Penny Pilot Classes and interacts with a Professional Customer/
Broker Dealer or Market Maker they will now be charged a fee of $0.50. 
Lastly, if a Market Maker is taking liquidity in Non-Penny Pilot 
Classes and interacts with a Professional Customer/Broker Dealer or 
Market Maker, they will now be charged $0.75. The Exchange believes the 
fees listed above are reasonable and appropriate as they are in line 
with what is currently charged by the industry.\9\
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    \9\ Id. On ISE and Arca, the general range for Market Maker fees 
is between $0.10 and $1.10. The Exchange notes that Arca provides a 
rebate to Market Makers that post liquidity in both Penny and Non-
Penny Pilot Classes.
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    Further, the Exchange believes it is equitable and not unfairly 
discriminatory to charge the Market Maker equal or less for making or 
taking liquidity than Professional Customers or Broker Dealers. 
Specifically, Market Makers have certain obligations that other 
Participants do not and can ultimately provide more value by directing 
liquidity to the Exchange, which the Exchange believes will benefit all 
Participants trading on BOX.
    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory for Professional Customers, Broker Dealers and Market 
Makers to be charged higher fees when interacting with Public Customers 
than interacting with other Participants on BOX. The Exchange believes 
they are reasonable as they are in a similar range with the fees in the 
options industry.\10\ Further, as stated above, the Exchange believes 
charging a higher fee for interactions with a Public Customer when 
compared to interactions with other Participants is equitable and not 
unfairly discriminatory because it allows the Exchange to incentivize 
Public Customer order flow by offering low fees and rebate potential to 
Public Customers in Non-Auction Transactions. The Exchange believes 
that providing these incentives for Non-Auction Transactions by Public

[[Page 27811]]

Customers will benefit all Participants trading on the Exchange by 
attracting this Public Customer order flow.
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    \10\ Id. On ISE and Arca, the general range for Broker Dealer 
and Professional Customer fees is between $0.10 and $1.10. The 
Exchange notes that Arca provides a rebate to Broker Dealers and 
Professional Customers that make liquidity in Penny and Non-Penny 
Pilot Classes.
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    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory that Professional Customers, Broker Dealers and Market 
Makers be charged a higher fee for certain orders removing liquidity, 
when compared to the fee they receive for orders that add liquidity. 
Charging a lower fee for orders that add liquidity will promote 
liquidity on the Exchange and ultimately benefit all participants on 
BOX. Further, the concept of incentivizing orders that add liquidity 
over orders that remove liquidity is commonly accepted within the 
industry as part of the ``Make/Take'' liquidity model.
    The Exchange believes that providing a credit to Public Customers 
that take liquidity from Professional Customers/Broker Dealers and 
Market Makers in Penny and Non-Penny Pilot Classes, compared to the 
$0.00 fee they are assessed when making liquidity against Professional 
Customers/Broker Dealers and Market Makers, is reasonable, equitable 
and not unfairly discriminatory. Instead of providing a credit for both 
making and taking liquidity, the Exchange believes the high credit for 
taking liquidity will attract Public Customer order flow to BOX which, 
in turn, will lead to more robust market making on the Exchange, thus 
benefitting all market participants. The securities markets generally, 
and BOX in particular, have historically aimed to improve markets for 
investors and develop various features within the market structure for 
Public Customer benefit. As such, the Exchange believes the proposed 
credit to Public Customers that take liquidity from Professional 
Customers/Broker Dealers and Market Makers in Penny and Non-Penny Pilot 
classes is reasonable.
    Finally, the Exchange also believes it is reasonable to charge 
Professional Customers and Broker Dealers and Market Makers less for 
certain executions in Penny Pilot issues compared to Non-Penny Pilot 
issues because these classes are typically more actively traded; 
assessing lower fees will further incentivize order flow in Penny Pilot 
issues on the Exchange, ultimately benefiting all Participants trading 
on BOX.
Tiered Volume Rebate for Non-Auction Transactions
    BOX believes it is reasonable, equitable and not unfairly 
discriminatory to adjust certain rebates in the volume based thresholds 
for Public Customers in all Non-Auction Transactions. The volume based 
thresholds and applicable rebates are meant to incentivize Public 
Customers to direct order flow to the Exchange to obtain the benefit of 
the rebate, which will in turn benefit all market participants by 
increasing liquidity on the Exchange. Other exchanges employ similar 
incentive programs; \11\ and the Exchange believes that the proposed 
changes to the volume based rebates are reasonable and competitive when 
compared to incentive structures at other exchanges.
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    \11\ See Section B of the PHLX Pricing Schedule entitled 
``Customer Rebate Program;'' and Cboe Exchange, Inc. (``CBOE'') 
Volume Incentive Program (``VIP''). CBOE's VIP pays certain tiered 
rebates to Trading Permit Holders for electronically executed 
multiply-listed option orders, which include AIM orders.
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    The Exchange believes it is reasonable to offer a higher per 
contract rebate for transactions in Non-Penny Pilot Classes compared to 
Penny Pilot Classes because Non-Penny Pilot Classes are typically less 
actively traded and have wider spreads. The Exchange believes that 
offering a higher rebate will incentivize Public Customer order flow in 
Non-Penny Pilot issues on the Exchange, ultimately benefitting all 
Participants trading on BOX.
    The Exchange believes it is reasonable to adjust certain rebates in 
Tiers 2 through 4 of the Tiered Volume Rebate for Public Customers 
making and taking liquidity in Non-Auction Transactions. The rebates 
are meant to incentivize Public Customers to direct order flow to the 
Exchange to obtain the benefit of the rebate, which will in turn 
benefit all market participants by increasing liquidity on the 
Exchange.
    The Exchange continues to believe it is equitable and not unfairly 
discriminatory to have these rebate structures for Public Customers in 
Non-Auction transactions. The practice of incentivizing increased 
Public Customer order flow is common in the options markets. While the 
Exchange proposes to decrease some of the Public Customer rebates in 
Penny and Non-Penny Pilot Classes, the Exchange believes that Public 
Customers will still benefit from the opportunity to obtain a rebate. 
Additionally, most Public Customers currently achieve a volume based 
rebate in their Non-Auction transactions.
    Further, the Exchange believes that providing a higher per contract 
rebate for Public Customers taking liquidity in Penny and Non-Penny 
Pilot Classes compared to making liquidity is reasonable and 
appropriate. As discussed above, the Exchange believes the proposed 
rebates for taking liquidity in Penny and Non-Penny Pilot Classes will 
attract Public Customer order flow to BOX which, in turn, will lead to 
more robust market making on the Exchange, thus benefitting all market 
participants. As such, the Exchange believes that the proposed changes 
are reasonable and appropriate.

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 that the proposed adjustments to fees in the 
Non-Auction Transactions fee structure will not impose a burden on 
competition among various Exchange Participants. Rather, BOX believes 
that the changes will result in the Participants being charged 
appropriately for these transactions and are designed to enhance 
competition in Non-Auction transactions on BOX. Submitting an order is 
entirely voluntary and Participants can determine which type of order 
they wish to submit, if any, to the Exchange.
    The Exchange believes that amending the proposed rebate structure 
for Public Customer Non-Auction Transactions will not impose a burden 
on competition among various Exchange Participants. The Exchange 
believes that the proposed changes will result in Public Customers 
being rebated appropriately for these transactions. Further, the 
Exchange believes that this proposal will enhance competition between 
exchanges because it is designed to allow the Exchange to better 
compete with other exchanges for order flow.
    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing exchanges. In such an environment, the Exchange must 
continually review, and consider adjusting, its fees and credits to 
remain competitive with other exchanges. For the reasons described 
above, the Exchange believes that the proposed rule change reflects 
this competitive environment.

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 27812]]

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 \12\ and Rule 19b-4(f)(2) 
thereunder,\13\ because it establishes or changes a due, or fee.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \13\ 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 [email protected]. Please include 
File Number SR-BOX-2018-21 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-2018-21. 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-2018-21, and should be submitted on 
or before July 5, 2018.
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    \14\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2018-12751 Filed 6-13-18; 8:45 am]
 BILLING CODE 8011-01-P