Document ID: SEC-2016-0218-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange LLC
Posted Date: 2016-02-10T05:00Z

[Federal Register Volume 81, Number 27 (Wednesday, February 10, 2016)]
[Notices]
[Pages 7171-7172]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-02607]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77055; File No. SR-BOX-2016-02]

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

February 4, 2016.
    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 27, 2016, 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 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 
lower certain fees for Non-Auction transactions 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 February 1, 2016. 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 make changes to Section I.A. of the BOX 
Fee Schedule, Exchange Fees for Non-Auction Transactions.
    Specifically, the Exchange proposes to amend certain fees in the 
pricing model outlined in Section I.A. (Non-Auction Transactions).\5\ 
In this section, fees and credits are assessed depending on 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.
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    \5\ Non-Auction Transactions are those transactions executed on 
the BOX Book.
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    Specifically, the Exchange proposes to reduce the Taker fees for 
Professional Customers, Broker Dealers and Market Makers interacting 
with Public Customers in Penny Pilot Classes. The fee for Professional 
Customers and Broker Dealers taking liquidity against Public Customers 
will be lowered to $0.50 from $0.64 and the fee for Market Makers 
taking liquidity against Public Customers will be lowered to $0.50 from 
$0.55.
    These transactions will remain exempt from the Liquidity Fees and 
Credits outlined in Section II of the BOX Fee Schedule. The revised fee 
structure 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                0.00            0.00            0.00            0.00
                                 Customer/Broker
                                 Dealer.
                                Market Maker....            0.00            0.00            0.00            0.00
Professional Customer or        Public Customer.            0.60            0.50            0.95            1.07
 Broker Dealer.
                                Professional                0.25            0.40            0.35            0.40
                                 Customer/Broker
                                 Dealer.
                                Market Maker....            0.25            0.44            0.35            0.44
Market Maker..................  Public Customer.            0.51            0.50            0.85            1.03
                                Professional                0.00            0.05            0.00            0.10
                                 Customer/Broker
                                 Dealer.
                                Market Maker....            0.00            0.29            0.00            0.29
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[[Page 7172]]

    The Exchange also proposes to make non-substantive technical 
chances [sic] to Section I.A. of the BOX Fee Schedule (Non-Auction 
Transactions) and remove references to credits.
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,\6\ 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 and credits [sic] 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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    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    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 for some time and the 
Exchange is simply adjusting certain credits [sic] within the 
structure.\7\ 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 
highest applicable fee on the Exchange's schedule, which may, instead, 
be lowered or changed to a credit depending upon how the order 
interacts.
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    \7\ See Securities Exchange Act Release No. 73547 (November 6, 
2014), 79 FR 67520 (November 13, 2014) (Notice of Filing and 
Immediate Effectiveness of SR-BOX-2014-25).
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    The Exchange believes the proposed fees for Non-Auction [sic] for 
Professional Customers, Broker Dealers and Market Makers when taking 
liquidity against Public Customers are reasonable, equitable and not 
unfairly discriminatory. The Exchange believes these fees are 
reasonable as they are in line with the current fees assessed by other 
competing exchanges.\8\
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    \8\ Miami Securities International Exchange, LLC (``MIAX'') 
charges $0.45 to firms and $0.47 to non-MIAX market makers, broker 
dealers and public customers other than priority customers for 
execution in Penny Pilot issues and NASDAQ OMX PHLX LLC (``PHLX'') 
charges $0.48 to professional customers, broker dealers and firms 
for execution in Penny Pilot issues. In addition, NASDAQ Options 
Market LLC (``NOM'') and BATS BZX Exchange (``BATS'') charge a $0.50 
take fee for removing liquidity in Penny Pilot issues.
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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 Exchange believes that the 
proposed adjustments to fees and rebates [sic] 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. 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.

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-2016-02 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-2016-02. 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-2016-02, and should be 
submitted on or before March 2, 2016.

    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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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-02607 Filed 2-9-16; 8:45 am]
 BILLING CODE 8011-01-P