Document ID: SEC-2015-0864-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange, LLC
Posted Date: 2015-05-20T04:00Z

[Federal Register Volume 80, Number 97 (Wednesday, May 20, 2015)]
[Notices]
[Pages 29114-29118]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12173]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-74957; File No. SR-BOX-2015-17]

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 Options Facility

May 13, 2015.
    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 April 30, 2015, 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).*COM057*
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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 May 1, 2015. 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 a number of changes to Section I of 
the BOX Fee Schedule (Exchange Fees).
Non-Auction Transactions
    First, the Exchange proposes to amend certain fees and credits 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. The Exchange recently adopted this pricing 
model \6\ and now proposes to amend certain fees and credits in this 
section.
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    \5\ Non-Auction Transactions are those transactions executed on 
the BOX Book.
    \6\ 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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    Specifically, the Exchange proposes to lower the Maker and Taker 
credits for Public Customers interacting with Professional Customers/
Broker Dealers or Market Makers in both Penny Pilot and Non-Penny Pilot 
Classes. Here, the Exchange proposes to lower the credit Public 
Customers receive when interacting with Professional Customers, Broker 
Dealers or Market Makers, regardless of whether they are adding or 
removing liquidity to $0.10 from $0.22 (Penny Pilot Classes) and to 
$0.45 from $0.57 (Non-Penny Pilot Classes).
    The Exchange also proposes to raise the Maker and Taker fees for 
Professional Customers or Broker Dealers in both Penny Pilot and Non-
Penny Pilot Classes. Specifically, when a Professional Customer or 
Broker Dealer interacts with a Public Customer in a Penny Pilot Class, 
the Exchange proposes to raise this fee to $0.60 from $0.55 (making 
liquidity) and to $0.64 from $0.59 (taking liquidity). For Non-Penny 
Pilot Classes the Exchange proposes to raise the fees in this same type 
of interaction to $0.95 from $0.90 (making liquidity) and to $0.99 from 
$0.94 (taking liquidity). For when a Professional Customer or Broker 
Dealer interacts with another Professional Customer or Broker Dealer in 
Penny Pilot Classes, the Exchange proposes to raise these fees to $0.25 
from $0.20 (making liquidity) and to $0.40 from $0.35 (taking 
liquidity). For Non-Penny Pilot Classes the Exchange proposes to raise 
the fees in this same type of interaction to $0.35 from $0.30 (making 
liquidity) and to $0.40 from $0.35 (taking liquidity). For when a 
Professional Customer or Broker Dealer interacts with a Market Maker in 
Penny Pilot Classes, the Exchange proposes to raise these fees to $0.25 
from $0.20 (making liquidity) and to $0.44 from $0.39 (taking 
liquidity). For Non-Penny Pilot Classes the Exchange proposes to raise 
the fees in this same type of interaction to $0.35 from $0.30 (making 
liquidity) and $0.44 from $0.39 (taking liquidity).
    Finally, the Exchange proposes to lower fees to $0.00 from $0.10 
for Market Makers interacting with other Market Makers in both Penny 
Pilot Classes and Non-Penny Pilot Classes.
    These transactions will remain exempt from the Liquidity Fees and 
Credits outlined in Section II of the BOX

[[Page 29115]]

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/
                                                                 credit       credit       credit       credit
----------------------------------------------------------------------------------------------------------------
Public Customer.....................  Public Customer.......        $0.00        $0.00        $0.00        $0.00
                                      Professional Customer/      ($0.10)      ($0.10)      ($0.45)      ($0.45)
                                       Broker Dealer.
                                      Market Maker..........      ($0.10)      ($0.10)      ($0.45)      ($0.45)
Professional Customer or Broker       Public Customer.......        $0.60        $0.64        $0.95        $0.99
 Dealer.
                                      Professional Customer/        $0.25        $0.40        $0.35        $0.40
                                       Broker Dealer.
                                      Market Maker..........        $0.25        $0.44        $0.35        $0.44
Market Maker........................  Public Customer.......        $0.51        $0.55        $0.85        $0.90
                                      Professional Customer/        $0.00        $0.05        $0.00        $0.10
                                       Broker Dealer.
                                      Market Maker..........        $0.00        $0.29        $0.00        $0.29
----------------------------------------------------------------------------------------------------------------

    For example, if a Public Customer submitted an order to the BOX 
Book in a Penny Pilot Class (making liquidity), the Public Customer 
would now be credited $0.10 if the order interacted with a Market 
Maker's order and the Market Maker (taking liquidity) would be charged 
$0.55. To expand on this example, if the Market Maker instead submitted 
an order to the BOX Book in a Penny Pilot Class (making liquidity), the 
Market Maker would be charged $0.51 if the order interacted with a 
Public Customer's order and the Public Customer (taking liquidity) 
would again be credited $0.10.
    In Section I.A.1., the Tiered Volume Rebate for Non-Auction 
Transactions, the Exchange gives a per contract rebate to Market Makers 
and Public Customers based on their average daily volume (``ADV'') 
considering all transactions executed on BOX by the Market Maker or 
Public Customer, respectively, as calculated at the end of each month. 
Specifically, the Exchange proposes to adjust the volume tiers and 
contract rebates in the Market Maker Monthly ADV section, as well 
certain contract rebates in the Public Customer Monthly ADV section. 
The new per contract rebate for Market Makers and Public Customers in 
Non-Auction Transactions as set forth in Section I.A.1. of the BOX Fee 
Schedule will now be as follows:

------------------------------------------------------------------------
                                                           Per contract
                Market maker monthly ADV                      rebate
------------------------------------------------------------------------
40,001 contracts and greater............................         ($0.10)
25,001 contracts to 40,000 contracts....................         ($0.05)
10,001 contracts to 25,000 contracts....................         ($0.03)
1 contract to 10,000 contracts..........................           $0.00
------------------------------------------------------------------------

------------------------------------------------------------------------
                                                           Per contract
               Public customer monthly ADV                    rebate
------------------------------------------------------------------------
35,001 contracts and greater............................         ($0.22)
15,001 contracts to 35,000 contracts....................         ($0.12)
5,001 contracts to 15,000 contracts.....................         ($0.06)
1 contract to 5,000 contracts...........................           $0.00
------------------------------------------------------------------------

Auction Transactions
    The Exchange then proposes to amend Section I.B. (Auction 
Transactions)\7\ and establish separate fees for Facilitation and 
Solicitation Orders.\8\ The Exchange currently assesses per contract 
execution fee on all Primary Improvement Orders, Solicitation Orders 
and Facilitation Orders in Section I.B.1. based upon the Initiating 
Participant's monthly average daily volume (ADV) in the total contract 
quantity submitted for these orders. These fees range from $0.25 to 
$0.03 per contract depending on the ADV.
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    \7\ Auction Transactions are those transactions executed through 
the Price Improvement Period (``PIP''), the Complex Order Price 
Improvement Period (``COPIP''), the Solicitation Auction mechanism, 
and the Facilitation Auction mechanism.
    \8\ Facilitation and Solicitation Orders are the matching contra 
orders submitted on the opposite side of the Agency Order.
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    The Exchange now proposes to adopt a flat $0.25 fee for 
Facilitation and Solicitation Orders \9\ and remove these Orders from 
the tiered fee schedule for Initiating Participants. The Exchange also 
proposes to specify that the fees for these Orders will be capped at 
$25,000 per month.
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    \9\ Public Customers are unable to submit Facilitation and 
Solicitation Orders on BOX.
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    With this, the Exchange then proposes to amend the language in the 
Section I.B.1. tiered fee schedule to remove all references to the 
Facilitation and Solicitation Orders and specify that the tiered fee 
schedule will now only be applicable to Initiating Participants 
submitting Primary Improvement Orders through the PIP. Additionally, 
each Initiating Participant's monthly ADV will now only be based on the 
total contract quantity of Primary Improvement Orders submitted to the 
PIP as calculated at the end of each month.
Other
    Finally, the Exchange is proposing to make additional non-
substantive changes to the Fee Schedule. Specifically, the Exchange is 
renumbering certain footnotes, headings and internal references to 
accommodate the above proposed changes to the Fee Schedule.
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,\10\ 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 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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    \10\ 15 U.S.C. 78f(b)(4) and (5).
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Exchange Fees
Non-Auction Transactions
    The Exchange believes amending the Non-Auction Transaction fees and 
credits is reasonable, equitable and not unfairly discriminatory. The 
fee structure for Non-Auction Transactions has been well received by 
Participants and the industry since it was adopted last year,\11\ and 
the Exchange believes it is now appropriate to adjust certain fees and 
credits. The proposed fee structure is intended to attract order flow 
to the Exchange by offering all market participants incentives to 
submit their Non-Auction orders to the Exchange. The practice of 
providing additional incentives to increase order flow is, and has 
been, a common practice in the

[[Page 29116]]

options markets.\12\ Further, the Exchange believes it is appropriate 
to provide incentives for market participants which will result in 
greater liquidity and ultimately benefit all Participants trading on 
the Exchange.
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    \11\ See supra, note 6.
    \12\ See BATS Exchange, Inc. (``BATS'') BATS Options Exchange 
Fee Schedule ``Standard Rates''; Chicago Board Options Exchange, 
Inc. (``CBOE'') Fee Schedule ``Volume Incentive Program'' (page 4); 
ISE Gemini, LLC (``Gemini'') Schedule of Fees, Section I. Regular 
Order Fees and Rebates ``Penny Symbols and SPY, and Non-Penny 
Symbols'' (page 4); Miami International Securities Exchange, LLC 
(``MIAX'') Fee Schedule Section I(a)(i) ``Market Maker Transaction 
Fees'' and ``Market Maker Sliding Scale'', and Section I(a)(iii) 
``Priority Customer Rebate Program''; NASDAQ OMX BX, Inc. (``BX 
Options'') Chapter XV, Section 2 BX Options Market--Fees and 
Rebates; NASDAQ OMX PHLX,(``PHLX''), Pricing Schedule Section B, 
``Customer Rebate Program''; NASDAQ Stock Market LLC (``NOM'') 
Chapter XV, Section 2 NASDAQ Options Market--Fees and Rebates; NYSE 
Amex, Inc. (``AMEX'') Fee Schedule Section I.C. NYSE Amex Options 
Market Maker Sliding Scale--Electronic; and NYSE Arca, Inc 
(``Arca'') Options Fees and Charges, ``Customer and Professional 
Customer Monthly Posting Credit Tiers and Qualifications for 
Executions in Penny Pilot Issues''(page 4).
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    The Exchange also believes it is equitable, reasonable and not 
unfairly discriminatory to assess fees and credits 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 last 
year and the Exchange is simply adjusting certain fees and credits 
within the structure.\13\ 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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    \13\ See supra, note 6.
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    The Exchange believes that the proposed fees and credits for Public 
Customers in Non-Auction Transactions are reasonable. Under the 
proposed fee structure Public Customers will either pay a Maker fee of 
$0.00 (when interacting with another Public Customer) or receive a 
Maker/Taker credit of $0.10 for Penny Pilot classes and $0.45 for Non-
Penny Pilot classes when interacting with a Professional Customer, 
Broker Dealer or Market Maker. The Exchange believes the credits listed 
above are reasonable as they are in line with the current fees assessed 
by other competing exchanges.\14\
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    \14\ Many U.S. Options Exchanges do not differentiate their fees 
between auction and non-auction transactions. However, Public 
Customers are charged anywhere from $0.00 to $0.85 within the 
following options exchange fee schedules. See NASDAQ OMX BX (``BX'') 
Options Pricing, Chapter XV, Sec. 2; NYSE Arca Options (``Arca'') 
Fees and Charges page 3; International Securities Exchange (``ISE'') 
Schedule of Fees, Section I.
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    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory to give Public Customers a credit 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. 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. 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. 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 charging Professional Customers and 
Broker Dealers higher fees than Public Customers for 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, which the Exchange aims to 
recover its costs by assessing Professional Customers and Broker 
Dealers higher fees for transactions.
    The Exchange also believes it is equitable and not unfairly 
discriminatory for BOX Market Makers to be assessed lower fees than 
Professional Customers and Broker Dealers for Non-Auction Transactions 
because of the significant contributions to overall market quality that 
Market Makers provide. Specifically, Market Makers can provide higher 
volumes of liquidity and lowering their fees will help attract a higher 
level of Market Maker order flow to the BOX Book and create liquidity, 
which the Exchange believes will ultimately benefit all Participants 
trading on BOX.
    The Exchange believes that the proposed fees and credits for 
Professional Customers, Broker Dealers and Market Makers 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 
either be charged a fee of $0.25 for Penny Pilot Classes or $0.35 for 
Non-Penny Pilot Classes. If the Professional Customer or Broker Dealer 
is instead taking liquidity in either Penny Pilot or Non-Penny Pilot 
Classes, it will be charged $0.40 if it interacts with a Professional 
Customer or Broker Dealer and $0.44 if it interacts with a Market 
Maker. The Exchange believes the fees listed above are reasonable as 
they are in line with the current fees assessed by other competing 
exchanges.\15\
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    \15\ Id. Professional Customer and Broker Dealers are charged 
anywhere from $0.10 to $0.94 within the option exchange fee 
schedules referenced above.
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    Similarly, in the proposed fee structure a Market Maker making 
liquidity in both Penny Pilot and Non-Penny Pilot Classes will now 
always be charged a fee of $0.00 for interacting with a Professional 
Customer/Broker Dealer or Market Maker. The Exchange believes the fees 
listed above are reasonable as they are in line with what is currently 
charged by the industry.\16\
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    \16\ See supra, note 13 [sic]. The general range for Market 
Maker fees is between $0.10 and $0.92 within the fee schedules 
referenced above.
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    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory for Professional Customers and Broker Dealers to be 
charged higher fees for both making and taking liquidity when 
interacting with Public Customers. A Professional Customer or Broker 
Dealer interacting with a Public Customer will now be charged a $0.60 
Maker fee or $0.64 Taker fee for Penny Pilot Classes and a $0.95 Maker 
fee or $0.99 Taker fee for Non-Penny Pilot Classes. The Exchange 
believes they are reasonable as they are in line when compared to 
similar fees in the options industry.\17\ Further, as stated above, the 
Exchange believes charging a higher fee for interactions with a Public 
Customer is equitable and not unfairly discriminatory because it allows 
the Exchange to incentivize Public Customer order flow by offering 
credits to Public Customers in Non-Auction Transactions. The Exchange 
believes that providing incentives for Non-Auction Transactions by 
Public Customers will benefit all Participants trading on the Exchange 
by attracting this Public Customer order flow.
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    \17\ See supra, note 14.

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[[Page 29117]]

    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory for Professional Customers, Broker Dealers and Market 
Makers to be charged a higher fee for 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.\18\
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    \18\ The ``Make/Take'' model is currently used by the 
International Securities Exchange LLC (``ISE') and NASDAQ OMX PHLX 
LLC (``PHLX'').
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    The Exchange believes it is equitable and not unfairly 
discriminatory to charge the Professional Customer or Broker Dealer 
more for taking liquidity against a Market Maker than they are charged 
for taking liquidity against other Professional Customers or Broker 
Dealers. As stated above, the Exchange proposes to provide certain 
incentives to Market Makers because of the high volumes of liquidity 
they can provide and increasing fees for Professional Customers and 
Broker Dealers taking liquidity will allow the Exchange to offer these 
incentives, ultimately benefiting all Participants trading on BOX.
    Finally, the Exchange also believes it is reasonable to charge 
Professional Customers and Broker Dealers 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. Additionally, 
the Exchange believes it is reasonable to give a greater credit to 
Public Customers for Non-Auction Transactions in Non-Penny Pilot issues 
as compared to Penny Pilot issues. Since these classes have wider 
spreads and are less actively traded, giving a larger credit will 
further incentivize Public Customers to trade in these classes, 
ultimately benefitting all Participants trading on BOX.
Tiered Volume Rebate for Non-Auction Transactions
    BOX believes it is reasonable, equitable and not unfairly 
discriminatory to adjust the tiered volume based rebates for Market 
Makers and Public Customers in all Non-Auction Transactions. The volume 
thresholds and applicable rebates are meant to incentivize Public 
Customers and Market Makers 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; \19\ and the Exchange believes that 
the proposed changes to the volume thresholds and rebates are 
reasonable and competitive when compared to incentive structures at 
other exchanges.
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    \19\ See Section B of the PHLX Pricing Schedule entitled 
``Customer Rebate Program;'' ISE Gemini's Qualifying Tier Thresholds 
(page 6 of the ISE Gemini Fee Schedule); and CBOE's Volume Incentive 
Program (VIP). CBOE's Volume Incentive Program (``VIP'') pays 
certain tiered rebates to Trading Permit Holders for electronically 
executed multiply-listed option orders which include AIM orders. 
Note that some of these exchanges base these rebate programs on the 
percentage of total national Public Customer volume traded on their 
respective exchanges, which the Exchange is not proposing to do.
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    The Exchange continues to believe it is equitable and not unfairly 
discriminatory to only have these rebate structures for Public 
Customers and Market Makers in Non-Auction transactions. The practice 
of incentivizing increased Public Customer order flow is common in the 
options markets. With this proposal, Public Customers benefit from the 
opportunity to obtain a higher rebate. Further, Market Makers can 
provide high volumes of liquidity and lowering their Non-Auction 
Transaction fees will potentially help attract a higher level of Market 
Maker order flow and create liquidity, which the Exchange believes will 
ultimately benefit all Participants trading on BOX.
Auction Transactions
    The Exchange believes that establishing a flat $0.25 fee for all 
Facilitation and Solicitation Orders is reasonable, equitable and not 
unfairly discriminatory. While the proposal will potentially raise the 
fees for certain Participants submitting Facilitation and Solicitation 
Orders, the Exchange believes the fee is reasonable as it is equal to 
highest fee that Participants are currently charged for these Orders 
under the volume based tier schedule in Section I.B.1., and will also 
be capped at $25,000 for each Participant per month. Further, the fee 
cap will act as a volume based discount for any Participants who meet 
the cap each month. The Exchange believes the fee cap is reasonable as 
it is lower than similar fee caps at other options exchanges.\20\ 
Finally, the Exchange believes that a $0.25 fee for Facilitation and 
Solicitation Orders is equitable and not unfairly discriminatory as all 
Participants will be charged the same fee with the exception of Public 
Customers, who are not able to submit these Orders in the BOX trading 
system.
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    \20\ See Section H of the ISE Fee Schedule ``Crossing Fee 
Caps.'' Transactions that are part of the origination or contra side 
of a Crossing Order (contracts that are submitted as part of a 
Facilitation, Solicitation, PIM, Block or QCC order) are capped at 
$75,000 per month.
---------------------------------------------------------------------------

    Finally, the Exchange believes that removing references to 
Facilitation and Solicitation Orders in the Tiered Fee Schedule in 
Section I.B.1. is reasonable, equitable and not unfairly 
discriminatory. The Exchange believes it is reasonable because 
Facilitation and Solicitation Orders will no longer be charged 
according to this section of the fee schedule, and therefore it is 
appropriate to both remove these references and specify that the 
monthly ADV will be now only be based on the total Primary Improvement 
Order contract quantity submitted to the PIP as calculated at the end 
of the month. The Exchange believes it is equitable and not unfairly 
discriminatory to remove these references as they apply equally to all 
Participants on BOX.

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 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.
    The Exchange believes that adopting a flat fee for Facilitation and 
Solicitation Orders will not impose a burden on competition because all 
Participants will be affected to the same extent, with the exception of 
Public Customers who cannot submit these Orders in the BOX trading 
system.
    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can

[[Page 29118]]

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.

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 \21\ and Rule 19b-4(f)(2) 
thereunder,\22\ because it establishes or changes a due, or fee.
---------------------------------------------------------------------------

    \21\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \22\ 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 rule-comments@sec.gov. Please include 
File Number SR-BOX-2015-17 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-2015-17. 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-2015-17, and should be 
submitted on or before June 10, 2015.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\23\
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    \23\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12173 Filed 5-19-15; 8:45 am]
BILLING CODE 8011-01-P