Document ID: SEC-2022-0079-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Exchange, LLC
Posted Date: 2022-01-20T05:00Z

[Federal Register Volume 87, Number 13 (Thursday, January 20, 2022)]
[Notices]
[Pages 3138-3140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-01069]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-93982; File No. SR-BOX-2022-03]

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

January 14, 2022.
    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 January 12, 2022, BOX 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 BOX Options Fee 
Schedule at Section VI, Regulatory Fees to reflect adjustments to sub-
section B. FINRA Fees and sub-section C. Registration and Continuing 
Education Fees.\5\
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    \5\ See Securities Exchange Act Release No. 90176 (October 14, 
2020), 85 FR 66592 (October 20, 2020) (SR-FINRA-2020-032) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Adjust FINRA Fees To Provide Sustainable Funding for FINRA's 
Regulatory Mission). See also SR-FINRA-2021-034.
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    While changes to the fee schedule pursuant to this proposal will be 
effective upon filing, the Exchange has designated that the proposed 
annual Maintaining Qualifications Program (``MQP'') fee will be 
implemented on January 31, 2022 \6\ and the proposed revised fee for 
the Regulatory Element will be implemented on January 1, 2023.\7\
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    \6\ The Exchange notes that this proposed implementation date 
coincides with the date FINRA proposes to implement the MQP Fee, as 
eligible individuals can begin making their election to participate 
in the MQP on January 31, 2022. The annual MQP fee is set forth in 
proposed Section 4(f)(2) of Schedule A to the FINRA By-Laws. See SR-
FINRA-2021-034. See also FINRA Rule 1240(c) (Continuing Education 
Program for Persons Maintaining Their Qualification Following the 
Termination of a Registration Category).
    \7\ The Exchange notes that this proposed implementation date 
coincides with the date FINRA has designated the proposed annual 
Regulatory Element fee to go into effect. FINRA has designated 
January 1, 2023 as the effective date of the transition to the 
annual Regulatory Element requirement. See SR-FINRA-2021-034. The 
Regulatory Element Fee is set forth in Section 4(f)(1) of Schedule A 
to the FINRA By-Laws. See SR-FINRA-2021-034. See also See also FINRA 
Rule 1240(a) (Regulatory Element).
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    The text of the proposed changes is attached [sic] as Exhibit 5.
    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 amend the Fee Schedule for trading on the 
BOX Options Market at Section VI.B. (FINRA Fees) and Section VI.C. 
(Registration and Continuing Education) to make clarifying changes to 
the section and reflect adjustments to FINRA Registration Fees.\8\ The 
FINRA fees are collected and retained by FINRA via Web CRD for the 
registration of employees of BOX Participants that are not FINRA 
members (``Non-FINRA members''). The Exchange is merely listing these 
fees on its Pricing Schedule. The Exchange does not collect or retain 
these fees. Today, Sections VI.B. and VI.C., of the BOX Options Fee 
Schedule, provide a list of FINRA Web CRD Fees, Fingerprint Processing 
Fees, and Continuing Education Fees. The Exchange proposes to amend the 
introductory paragraph of Section VI.B. to add a sentence to make it 
clear that FINRA collects the fees listed within this section. The 
Exchange also proposes to add the heading, General Registration Fees, 
before the list of fees collected by FINRA. The fees listed within 
Section VI.B., reflect fees set by FINRA. Specifically, with respect to 
the General Registration Fees, the Exchange proposes to increase the 
$100 fee to $125 for each initial Form U4 filed for the registration of 
a representative or principal. This amendment is made in accordance 
with a recent FINRA rule change to adjust to its fees.\9\ The Exchange 
is proposing additional technical and conforming amendments to the Fee 
Schedule, including updating the footnote numbering in Section VII, 
Billing, and Section VIII, Participant Fees.
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    \8\ FINRA operates Web CRD, the central licensing and 
registration system for the U.S. securities industry. FINRA uses Web 
CRD to maintain the qualification, employment and disciplinary 
histories of registered associated persons of broker-dealer.
    \9\ FINRA noted in its rule change that it was adjusting its 
fees to provide sustainable funding for FINRA's regulatory mission. 
See Securities Exchange Act Release No. 90176 (October 14, 2020), 85 
FR 66592 (October 20, 2020) (SR-FINRA-2020-032).
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    The proposed rule change also makes non-substantive clarifying 
changes to certain provisions of the Fee Schedule at Section VI, 
Regulatory Fees, VI.B. (FINRA Fees) and VI.C. (Registration and 
Continuing Education). The Exchange proposes to add clarifying language 
to Section VI.B. Specifically, the Exchange is proposing to add

[[Page 3139]]

footnote 26 to clarify that the FINRA Web CRD Processing Fee is paid 
directly to FINRA for each initial Form U4 filed for the registration 
of a representative or principal. The Exchange is also proposing to 
adopt footnote 27, to make clear that the FINRA Disclosure Processing 
Fee is paid directly to FINRA for the additional processing of each 
initial or amended Form U4, Form U5 or Form BD that includes the 
initial reporting, amendment, or certification of one of more 
disclosure events or proceedings. The Exchange proposes to add language 
to make it clear that the FINRA Annual System Processing Fee is 
assessed only during renewals and that the Fingerprinting Fees are 
processing fees.
    The Exchange also proposes to amend Section VI.C., to reflect the 
current fees assessed by FINRA and add clarifying language to provide 
more transparency to the FINRA Fees listed within the BOX Fee Schedule. 
The Exchange proposes to decrease the $55 fee per session to $18 per 
session. This fee is assessed to each individual who completes the 
Regulatory Element of the Continuing Education requirements pursuant to 
FINRA rules. This amendment is made in accordance with a recent FINRA 
rule change to adjust to its fees.\10\
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    \10\ See SR-FINRA-2021-034 (December 30, 2021). FINRA notes that 
the proposed $18 annual fee is comparable to the current $55 fee 
over a three-year period.
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    The Exchange proposes to remove the reference to the S101 within 
Section VI.C.2., the Continuing Education Fee and the corresponding 
footnote 29. This amendment will clarify that the Continuing Education 
Fees that FINRA assesses applies to each individual who is required to 
complete the Regulatory Element of the Continuing Education 
requirements. The Exchange also proposes to add clarifying language to 
footnote 28 to make it clear that the referenced $120 fee to be paid to 
FINRA includes the fees for the Securities Industry Essentials Exam, 
and the Series 57 exam.
    The Exchange proposes to add Section VI.C.3., Maintaining 
Qualifications Program Fee, to adopt the proposed annual MQP Fee of 
$100. The Exchange also proposes to adopt footnote 30 to specify that 
the MQP Fee will be paid directly to FINRA and will be assessed 
annually to each individual electing to participate in the continuing 
education program under FINRA Rule 1240(c). This amendment is made in 
accordance with a recent FINRA rule change to adjust to its fees.\11\
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    \11\ See SR-FINRA-2021-034 (December 30, 2021). FINRA notes that 
the proposed MQP is a voluntary program.
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    The FINRA Web CRD Fees are user-based and there is no distinction 
in the cost incurred by FINRA if the user is a FINRA member or a Non-
FINRA member. Accordingly, the proposed fees mirror those currently 
assessed by FINRA.\12\
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    \12\ The Exchange notes that other options exchanges have 
recently filed similar proposals to increase the fee from $100 to 
$125 for each initial Form U4 filed for the registration of a 
representative or principal in accordance with a recent FINRA rule 
change to adjust to its fees. See Securities Exchange Release No. 
34-93582 (November 16, 2021), 86 FR 66373 (November 22, 2021) (SR-
ISE-2021-24) (Notice of Filing and Immediate Effectiveness). See 
also Securities Exchange Release No. 34-93583 (November 16, 2021), 
86 FR 66356 (November 22, 2021) (SR-GEMX-2021-10) (Notice of Filing 
and Immediate Effectiveness). See also Securities Exchange Release 
No. 34-93602 (November 17, 2021), 86 FR 66604 (November 23, 2021) 
(SR-NASDAQ-2021-087) (Notice of Filing and Immediate Effectiveness). 
See also Securities Exchange Release No. 34-93584 (November 16, 
2021), 86 FR 66363 (November 22, 2021) (SR-MRX-2021-11) (Notice of 
Filing and Immediate Effectiveness). See also Securities Exchange 
Release No. 34-93587 (November 16, 2021), 86 FR 66375 (November 22, 
2021) (SR-BX-2021-052) (Notice of Filing and Immediate 
Effectiveness). See also Securities Exchange Release No. 34-93577 
(November 15, 2021), 86 FR 64976 (November 19, 2021) (SR-PHLX-2021-
68) (Notice of Filing and Immediate Effectiveness).
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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,\13\ 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.
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    \13\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes it is reasonable to increase the $100 fee for 
each initial Form U4 filed for the registration of a representative or 
principal to $125 in accordance with an adjustment to FINRA's fees.\14\ 
The Exchange's rule text will reflect the current registration rate 
that will be assessed by FINRA as of January 2, 2022. Additionally, 
adding language that makes it clear that FINRA will bill and collect 
these general registration fees will bring greater transparency to the 
FINRA fees as listed within the BOX Fee Schedule. The Exchange believes 
it is reasonable to decrease the $55 per session fee to $18 per session 
in accordance with a recent FINRA rule change to adjust to its 
fees.\15\ Also, amending the Continuing Education Fees to remove the 
reference to the S101 will bring greater clarity to the Continuing 
Education fees currently assessed by FINRA and listed within the BOX 
Fee Schedule. Noting that the fees are paid directly to FINRA and the 
addition of the other proposed clarifying changes will provide more 
information to Participants regarding the fees for Continuing 
Education. The Exchange also believes it is reasonable to add Section 
VI.C.3. to list the proposed MQP Fee of $100 in accordance with a 
recent FINRA rule change to adjust to its fees.\16\ Finally, making 
clear that the FINRA Annual System Processing Fee is assessed only 
during renewals, the Fingerprinting Fees are processing fees, and that 
Series 57 Exam fee includes the fee for the Securities Industry 
Essentials Exam, will provide greater transparency regarding the fees 
collected by FINRA and listed in the BOX Fee Schedule. The proposed 
fees are identical to those adopted by FINRA for use of Web CRD for 
disclosure and the registration of FINRA members and their associated 
persons. These costs are borne by FINRA when a Non-FINRA member uses 
Web CRD.
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    \14\ See supra note 5.
    \15\ See supra note 10.
    \16\ See supra note 11.
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    The Exchange believes that its proposal to increase the $100 fee 
for each initial Form U4 filed for the registration of a representative 
or principal to $125 is equitable and not unfairly discriminatory as 
the amendment will reflect the current fee that will be assessed by 
FINRA to all Participants who require Form U4 filings as of January 2, 
2022. The Exchange also believes that its proposal to decrease the 
Continuing Education fee from $55 per session to $18 per session is not 
unfairly discriminatory as the amendment will reflect the current fee 
that will be assessed by FINRA to all Participants who complete the 
Regulatory Element of the Continuing Education requirements pursuant to 
FINRA rules. Additionally, reflecting the current Continuing Education 
Fees for the S101 or S201 is equitable and not unfairly discriminatory 
as FINRA currently assesses these rates to all Participants that are 
required to have those registrations. The Exchange also believes that 
its proposal to list the MQP Fee of $100 is not unfairly discriminatory 
as the amendment will reflect the annual fee that will be assessed by 
FINRA to all Participants who elect to participate in the MQP pursuant 
to FINRA rules. Finally, making clear that FINRA will bill and collect 
these fees will bring greater

[[Page 3140]]

transparency to FINRA's fees as listed within the BOX Fee Schedule. 
Further, the proposal is also equitable and not unfairly discriminatory 
because the Exchange will not be collecting or retaining these fees, 
therefore, the Exchange will not be in a position to apply them in an 
inequitable or unfairly discriminatory manner.

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 does not believe 
that this proposal creates an unnecessary or inappropriate inter-market 
burden on competition as FINRA's fees apply to all market participants. 
Additionally, the Exchange does not believe that this proposal creates 
an unnecessary or inappropriate intra-market burden on competition as 
the increased fee for each initial Form U4 filed for the registration 
of a representative or principal will be assessed by FINRA to all 
Participants who require Form U4 filings as of January 2, 2022.
    The Exchange does not believe that this proposal creates an 
unnecessary or inappropriate intra-market burden on competition as the 
decreased Continuing Education fee from will be assessed by FINRA to 
all Participants who complete the Regulatory Element of the Continuing 
Education requirements pursuant to FINRA rules. Also, clarifying that 
the Continuing Education Fees apply to all individual required to 
complete the Regulatory Element of the Continuing Education 
requirements does not impose an undue burden on competition as FINRA 
currently assesses these rates to all Participants that are required to 
have those registrations. The Exchange also does not believe that its 
proposal to list the proposed annual MQP Fee of $100 creates an 
unnecessary or inappropriate intra-market burden on competition as this 
annual fee that will be assessed by FINRA to all Participants who elect 
to participate in the MQP pursuant to FINRA rules. Additionally, making 
clear that FINRA will bill and collect these fees will bring greater 
transparency to the FINRA fees listed within the BOX Fee Schedule. 
Finally, clarifying that the FINRA Annual System Processing Fee is 
assessed only during renewals, the Fingerprinting Fees are processing 
fees, and that Series 57 exam fee includes the fee for the Securities 
Industry Essentials Exam, will provide more information to Participants 
regarding the fees collected by FINRA and listed within the BOX Fee 
Schedule. Further, the proposal does not impose an undue burden on 
competition because the Exchange will not be collecting or retaining 
these fees, therefore, the Exchange will not be in a position to apply 
them in an inequitable or unfairly discriminatory manner.

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 Effectiveness

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) of the Exchange Act \17\ and Rule 19b-4(f)(2) 
thereunder,\18\ because it establishes or changes a due, or fee.
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    \17\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \18\ 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 [email protected]. Please include 
File Number SR-BOX-2022-03 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-2022-03. 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-2022-03 and should be submitted on 
or before February 10, 2022.
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    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2022-01069 Filed 1-19-22; 8:45 am]
BILLING CODE 8011-01-P