Document ID: SEC-2021-0106-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Exchange, LLC
Posted Date: 2021-01-26T05:00Z

[Federal Register Volume 86, Number 15 (Tuesday, January 26, 2021)]
[Notices]
[Pages 7130-7135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-01585]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-90946; File No. SR-BOX-2021-01]

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 Facility

January 19, 2021.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on January 4, 2021, BOX Exchange LLC (``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 on 
the BOX Options Market LLC (``BOX'') facility. 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

[[Page 7131]]

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 BOX. 
First, the Exchange proposes to revise certain qualification thresholds 
and fees in Section I.B. of the BOX Fee Schedule. Specifically, the 
Exchange proposes to eliminate Tiers 2 and 3 of the Primary Improvement 
Order fee structure. The Exchange then proposes to amend the percentage 
threshold for Tier 1 from 0.000%-0.049% to 0.000% to 0.449%. The 
Exchange also proposes to decrease the fee for Tier 1 from $0.25 to 
$0.05. The Exchange next proposes to change current Tier 4 to new Tier 
2. The percentage threshold and fee for proposed Tier 2 will remain 
unchanged.
    Next, the Exchange proposes to eliminate Section III \5\ (Liquidity 
Fees and Credits) from the Fee Schedule and establish Break-Up Credits 
in (1) Section I.B (PIP and COPIP Transactions); (2) Section I.C 
(Facilitation and Solicitation Transactions); and (3) Section I.C.2 
(Strategy Order Facilitation and Solicitation Transactions). The 
Exchange is redistributing the fees and rebates outlined in Section III 
to the appropriate places within the respective fee structures in the 
BOX Fee Schedule. The Exchange believes the proposed changes will make 
the Fee Schedule easier to navigate and will reduce investor confusion.
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    \5\ The Exchange notes Section III.C.1 is being relocated as 
discussed in further detail below.
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PIP and COPIP Transactions
    Currently, under Section III.A, a Public Customer PIP or COPIP 
Order receives the ``removal'' credit ($0.34 for Penny Interval Classes 
and $0.81 for Non-Penny Interval Classes), while the corresponding 
Primary Improvement Order and any Improvement Orders are charged the 
``add'' fee ($0.34 for Penny Interval Classes and $0.81 for Non-Penny 
Interval Classes). First, the Exchange proposes to amend PIP and COPIP 
Improvement Order fees within Section 1.B to include the liquidity 
``add'' fees that are being deleted in Section III. As such, the 
Exchange proposes to increase Public Customer Improvement Orders fees 
in Penny Interval Classes to $0.49 from $0.15 and in Non-Penny Interval 
Classes to $0.96 from $015.\6\ Next, the Exchange proposes to no longer 
assess the corresponding Primary Improvement Order to PIP and COPIP 
Orders the ``add'' fee of $0.34 for Penny Interval Classes or $0.81 for 
Non-Penny Interval Classes. The Exchange notes that this is similar to 
how the Exchange currently assesses SPY PIP and COPIP fees and credits 
on BOX.\7\ The Exchange believes this proposed change will result in 
increased order flow to BOX's PIP and COPIP mechanisms. Further, the 
Exchange proposes to increase Public Customer SPY Improvement Order 
fees to $0.50 from $0.05.\8\
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    \6\ The Exchange is including the $0.34 ``add'' fee into the 
Improvement Order fee detailed in the PIP and COPIP fee structure. 
The Exchange notes that under this proposal, there is no change to 
the fees currently assessed for this transaction
    \7\ See Securities Exchange Act Release No. 89622 (August 20, 
2020), 85 FR 52654 (August 26, 2020) (SR-BOX-2020-34).
    \8\ Currently, under Section III, Improvement Orders to the SPY 
PIP and COPIP Orders are charged the ``add'' fee of $0.45. The 
Exchange is including this ``add'' fee into the Improvement Order 
fee detailed in the PIP and COPIP Fee Structure.
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    The Exchange next proposes to increase Professional Customer, 
Broker Dealer and Market Maker Improvement Order fees. Currently, if a 
Non-Public Customer PIP or COPIP Order does not trade with its Primary 
Improvement Order, the Primary Improvement Order shall receive the 
``removal'' credit ($0.34 for Penny Interval Classes or $0.81 for Non-
Penny Interval Classes) and any corresponding Improvement Order 
responses will be charged the ``add'' fee ($0.34 for Penny Interval 
Classes or $0.81 for Non-Penny Interval Classes). Similar to the 
changes discussed above, the Exchange now proposes to increase Non-
Public Customer Improvement Order fees in Penny Interval Classes to 
$0.50 from $0.16 and to $1.15 from $0.34 in Non-Penny Interval Classes. 
Further, the Exchange proposes to increase non-Public Customer SPY 
Improvement Orders to $0.50 from $0.05.\9\
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    \9\ Currently, under Section III, Improvement Orders to the SPY 
PIP and COPIP Orders are charged the ``add'' fee of $0.45. The 
Exchange is including this ``add'' fee into the Improvement Order 
fee detailed in the PIP and COPIP Fee Structure.
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    Next, the Exchange proposes to establish PIP and COPIP Break-Up 
Credits in Section I.B. First, the Exchange proposes to establish PIP 
and COPIP Break-Up Credits of $0.34 for Penny Interval Classes and 
$0.81 for Non-Penny Interval Classes for Public Customer PIP and COPIP 
Transactions. The Exchange notes that this is how the Exchange 
currently assesses the $0.34 or $0.81 ``removal'' credits for Public 
Customer PIP and COPIP Orders executed through the PIP and COPIP 
mechanisms detailed in BOX's current Fee Schedule. The Exchange is 
simply seeking to relocate the credits into the PIP and COPIP fee 
structure. Next, the Exchange proposes to establish a SPY Break-Up 
Credit of $0.45 for Public Customer SPY PIP and COPIP Orders submitted 
to the PIP or COPIP mechanisms. As discussed herein, the same $0.45 
``removal'' credit is assessed for these Public Customer SPY PIP and 
COPIP transactions under Section III in BOX's current Fee Schedule. 
Further, the Exchange proposes to add text which details that the 
Public Customer SPY PIP or COPIP Order submitted to the PIP and COPIP 
mechanisms that do not trade with their Primary Improvement Order shall 
receive the Break-Up Credit. The Exchange again notes that this is how 
the ``removal'' credit is currently assessed for these transactions 
under Section III.A in BOX's current Fee Schedule.
    Next, the Exchange proposes to establish PIP and COPIP Break-Up 
Credits of $0.34 for Penny Interval Classes and $0.81 for Non-Penny 
Interval Classes for Professional Customer, Broker Dealer, and Market 
Maker PIP and COPIP Transactions. The Exchange also proposes to add 
text which details who receives the Break-Up Credit for these orders. 
Specifically, if a Non-Public Customer PIP or COPIP Order does not 
trade with its Primary Improvement Order, the Primary Improvement Order 
shall receive the Break-Up Credit of $0.34 for Penny Interval Classes 
or $0.81 for Non-Penny Interval Classes. The Exchange notes that this 
is how the ``removal'' credit is assessed for these transactions in 
BOX's current Fee Schedule. The Exchange simply seeks to relocate the 
credit for these transactions into the PIP and COPIP fee structure.
    Next, the Exchange proposes to establish a SPY Break-Up Credit of 
$0.45 for Non-Public Customer SPY PIP and COPIP Orders submitted to the 
PIP or COPIP mechanisms. The Exchange also proposes to add text which 
details who receives the Break-Up Credit for these orders. 
Specifically, SPY PIP and COPIP Orders submitted to the PIP and COPIP 
mechanisms that do not trade with their Primary Improvement Order shall 
receive the $0.45 Break-Up Credit. The Exchange notes that this is how 
the ``removal'' credit is assessed for these transactions in BOX's 
current Fee

[[Page 7132]]

Schedule. The Exchange simply seeks to relocate the credit for these 
transactions into the PIP and COPIP fee structure.
    Lastly, the Exchange proposes to relocate and revise the Fee 
Schedule language regarding PIP and COPIP Orders executing against 
Unrelated Orders.\10\ Specifically, the Exchange proposes to clarify 
that each PIP Order or COPIP Order that executes against an Unrelated 
Order on the BOX Book shall be treated as a Non-Auction Transaction.
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    \10\ For the PIP, an Unrelated Order is a non-Improvement Order 
entered into the BOX market during a PIP. For the COPIP, an 
Unrelated Order is a non-Improvement Order entered on BOX during a 
COPIP or BOX Book Interest during a COPIP.
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Facilitation and Solicitation Transactions
    Currently, under Section III.B of the BOX Fee Schedule, Agency 
Orders submitted to the Facilitation and Solicitation mechanisms that 
do not trade with their contra order receive the ``removal'' credit 
($0.25 for Penny Interval Classes and $0.75 for Non-Penny Interval 
Classes). Responses to Facilitation and Solicitation Orders executed in 
these mechanisms are charged the ``add'' fee ($0.25 for Penny Interval 
Classes and $0.75 for Non-Penny Interval Classes). First, the Exchange 
proposes to increase the Response Fees (within Section 1.C) in the 
Facilitation and Solicitation mechanisms for all account types to $0.50 
from $0.25 for Penny Interval Classes and to $1.15 from $0.40 for Non-
Penny Interval Classes.\11\ Next, the Exchange proposes to establish 
Facilitation and Solicitation Break-Up Credits in the Facilitation and 
Solicitation Transaction fee structure. Next, the Exchange proposes to 
establish a $0.25 Break-Up Credit for Penny Interval Classes and $0.75 
Break-Up Credit for Non-Penny Interval Classes for all account types. 
The Exchange also proposes to add text which details who receives the 
Break-Up Credit for these orders. Specifically, Agency Orders submitted 
to the Facilitation and Solicitation mechanisms that do not trade with 
their contra order shall receive the Break-Up Credit. The Exchange 
notes that this is how the ``removal'' credit is currently assessed for 
these transactions in Section III of BOX's current Fee Schedule. The 
Exchange simply seeks to relocate the credit for these transactions 
into the Facilitation and Solicitation fee structure.
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    \11\ Similar to the proposed changes in the PIP and COPIP 
section, the Exchange is including the $0.25 and $0.75 ``add'' fees 
into the Responses Order fees detailed in the Facilitation and 
Solicitation Transaction fee structure in Section I.C. The Exchange 
notes that under this proposal, there is no change to the fees 
currently assessed for these transactions.
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    Next, the Exchange proposes to amend Section I.C.2 (Strategy Order 
Facilitation and Solicitation Transactions). Currently, Strategy Order 
Facilitation and Solicitation Transactions in Section I.C.2 are exempt 
from the liquidity fees and credits detailed Section III.B of the Fee 
Schedule. The Exchange now proposes to remove the exemption and assess 
these transactions fees and credits similar to those detailed in 
current Section III.B. Specifically, the Exchange proposes to increase 
Response fees in the Facilitation and Solicitation mechanisms to $0.50 
from $0.25 for Penny Interval Classes and to $1.15 from $0.40 for Non-
Penny Interval Classes. The Exchange believes the proposed change is 
reasonable as identical fees exist for regular Facilitation or 
Solicitation transactions on BOX.
    Next, the Exchange proposes to establish Strategy Order 
Facilitation and Solicitation Break-Up Credits in the fee structure 
detailed in Section I.C.2 of the BOX Fee Schedule. Specifically, the 
Exchange proposes to establish a $0.25 Break-Up Credit for Penny 
Interval Classes and $0.75 Break-Up Credit for Non-Penny Interval 
Classes for all account types. The Exchange also proposes to add text 
which details who receives the Break-Up Credit for these orders. 
Specifically, Agency Orders submitted to the Facilitation and 
Solicitation mechanisms that do not trade with their contra order shall 
receive the Break-Up Credit. The Exchange notes that this is how the 
``removal'' credit is currently assessed for regular Facilitation and 
Solicitation transactions in Section III of BOX's current Fee Schedule. 
The Exchange believes that mirroring the fees and credits in place for 
regular Facilitation and Solicitation transactions is reasonable and 
appropriate.
    Finally, the Exchange proposes to relocate Section III.C.1., which 
details transactions which occur on the opening or re-opening, to 
Section I.A.2. of the Fee Schedule. The Exchange also proposes to make 
a number of non-substantive changes to the Fee Schedule which include 
renumbering Sections and eliminating obsolete text due to the proposed 
changes discussed herein.
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,\12\ 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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    \12\ 15 U.S.C. 78f(b)(4) and (5).
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    First, the Exchange believes that the proposed changes in Section 
I.B.1 (Primary Improvement Orders) of the BOX Fee Schedule are 
reasonable, equitable and non-discriminatory. The proposed changes to 
the thresholds are equitable and not unfairly discriminatory as they 
are available to all BOX Participants that initiate Auction 
Transactions, and Participants may choose whether or not to take 
advantage of the percentage thresholds and their applicable discounted 
fees. Further, the Exchange believes that the change to the threshold 
in proposed Tier 1 is reasonable and competitive as it is intended to 
allow more Participants to qualify for the discounted fee, which the 
Exchange believes will incentivize Participants to direct order flow to 
the Exchange, in turn benefiting all market participants on the 
Exchange. Further, the Exchange believes that the proposed change to 
decrease the fee assessed in Tier 1 from $0.25 to $0.05 is reasonable 
and appropriate, as this tiered fee schedule is in place to provide 
incentives to BOX Participants to submit their Public Customer Orders 
into the PIP for potential price improvement. This reduced fee, 
combined with the amended percentage thresholds discussed above, are 
meant to incentivize more Participant to submit Price Improvement 
Orders to the Exchange, which the Exchange believes will further 
incentivize Participants to direct order flow to the Exchange, in turn 
benefiting all market participants on the Exchange.
PIP and COPIP Transactions
    The Exchange believes the proposed changes to the fee structure 
detailed in Section I.B. are reasonable, equitable and not unfairly 
discriminatory. The Exchange believes the proposed fee changes to 
Improvement Orders in the PIP and COPIP Transaction fee structure are 
reasonable as they reflect the current fees charged for these 
transactions on the Exchange. As noted herein, the Exchange simply 
seeks to relocate the liquidity fees detailed in Section III to be 
included in the PIP and COPIP Improvement Order fees in the PIP and 
COPIP Transaction fee structure. The Exchange believes that the 
proposed change will increase overall readability of the BOX Fee 
Schedule and reduce

[[Page 7133]]

investor confusion. Further, the Exchange believes it is reasonable to 
no longer assess the ``add'' fee of $0.34 for Penny Interval Classes or 
$0.81 for Non-Penny Interval Classes for corresponding Primary 
Improvement Order to Public Customer PIP and COPIP Orders. The Exchange 
notes that this is similar to how the Exchange currently assesses SPY 
PIP and COPIP fees and credits on BOX.\13\ The Exchange believes that 
mirroring the current structure in place for SPY PIP and COPIP fees and 
credits is reasonable as the Exchange believes that the proposed change 
will incentivize Participants to submit Public Customer order flow 
through the PIP and COPIP auction mechanisms thereby benefitting all 
market participants through promoting market depth, facilitating 
tighter spreads and enhancing price discovery. Further, the Exchange 
believes that the proposed change is equitable and not unfairly 
discriminatory as the change applies to all Participants, regardless of 
account type.
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    \13\ See supra note 7.
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    Under this proposal and as discussed above, the corresponding 
Primary Improvement Orders to Public Customer PIP and COPIP Orders will 
no longer be assessed the $0.34 ``add'' fee for Penny Interval Classes 
and $0.81 for Non-Penny Interval Classes; however, Improvement Orders 
will continue to be charged the $0.34 ``add'' fee for Penny Interval 
Classes and $0.81 ``add'' fee for Non-Penny Interval Classes. The 
Exchange believes it is reasonable, equitable and not unfairly 
discriminatory to charge higher exchange fees for responders in the PIP 
and COPIP mechanisms than for initiators of these orders and the contra 
orders. The Exchange believes it is reasonable when compared to a 
similar practice for fees at a competing venue.\14\ For example, at 
Nasdaq ISE the fee for both the initiating and contra order for PIM 
Orders \15\ is $0.10 for Select Symbols \16\ for all account types 
except Priority Customers who are charged no fees. Responses to these 
orders are charged $0.50 for Select Symbols regardless of account type. 
The Exchange also notes that a differential of fees between initiators 
and responders currently exists in the Facilitation and Solicitation 
auction mechanisms and for SPY PIP and COPIP Orders on BOX. Further, 
the Exchange continues to believe that the proposed differential is 
reasonable because responders to PIP and COPIP Orders are willing to 
pay a higher fee for liquidity discovery. Responders to PIP and COPIP 
Orders are given the opportunity to interact with customer order flow 
which, in turn, allows for the opportunity for increased executions on 
the Exchange thus benefitting all market participants. The Exchange 
also believes it is reasonable and appropriate to charge initiators of 
PIP and COPIP Orders less than responders because initiators bring 
liquidity to the Exchange which, in turn, results in increased 
opportunity for more executions on BOX. As such, the Exchange believes 
the differential is reasonable and appropriate.
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    \14\ See Nasdaq ISE LLC (``Nasdaq ISE'') Pricing Schedule 
Section 3. (Regular Order Fees and Rebates).
    \15\ On Nasdaq ISE, a PIM Order is an order entered into the 
Price Improvement Mechanism (``PIM''). This is similar to BOX's PIP 
and COPIP mechanism.
    \16\ ``Select Symbols'' and ``Non-Select Symbols'' referred to 
in the Nasdaq ISE Fee Schedule are identical to ``Penny Interval 
Classes'' and ``Non-Penny Interval Classes'' on BOX.
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    The Exchange also believes the proposed change to establish PIP and 
COPIP Break-Up Credits is reasonable, equitable, and not unfairly 
discriminatory. The Exchange again notes that these credits are already 
assessed in current Section III of the BOX Fee Schedule. The Exchange 
simply seeks to relocate the credits to the appropriate fee structure 
in order to increase overall readability and reduce investor confusion. 
As such, the Exchange believes the proposed change is reasonable, 
equitable and not unfairly discriminatory.
Facilitation and Solicitation Transactions
    The Exchange believes the proposed changes to the fee structure 
detailed in Section I.C. are reasonable, equitable and not unfairly 
discriminatory. The Exchange believes the proposed fee changes to 
Responses in the Facilitation and Solicitation Mechanisms are 
reasonable as they reflect the current fees charged for these 
transactions on the Exchange. As noted herein, the Exchange seeks to 
relocate the liquidity fees detailed in Section III to be included in 
the Facilitation and Solicitation Transaction fee structure. The 
Exchange believes that the proposed change will increase overall 
readability of the BOX Fee Schedule and reduce investor confusion.
    The Exchange also believes the proposed change to establish 
Facilitation and Solicitation Break-Up Credits is reasonable, 
equitable, and not unfairly discriminatory. The Exchange again notes 
that these credits are already assessed in current Section III of the 
BOX Fee Schedule. The Exchange seeks to relocate the credits to the 
appropriate fee structure in order to increase overall readability and 
reduce investor confusion. As such, the Exchange believes the proposed 
change is reasonable, equitable and not unfairly discriminatory.
    The Exchange believes the proposed changes to the fee structure 
detailed in Section I.C.2 are reasonable, equitable and not unfairly 
discriminatory. First, the Exchange believes that increasing the 
Response fees for Strategy Facilitation and Solicitation Orders in 
Penny and Non-Penny Interval Classes is reasonable as, under this 
proposal, identical fees will exist for regular order Responses in the 
Facilitation and Solicitation auction mechanisms as detailed in 
proposed Section I.C. The Exchange believes that mirroring these fees 
is appropriate as both regular orders and Strategy Orders are submitted 
through the same Facilitation or Solicitation mechanism. As such, the 
Exchange believes the proposed change is reasonable and appropriate as 
it will streamline the fees assessed for all Responses submitted 
through the Facilitation and Solicitation auction mechanisms and 
thereby reduce investor confusion with respect to how much Responses 
are charged in these mechanisms. Further, the Exchange believes that 
the fees are reasonable and competitive when compared to similar fees 
at competing venues.\17\ Lastly, the Exchange believes that the 
proposed change is equitable and not-unfairly discriminatory as it 
applies to all categories of Participants and across all account types.
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    \17\ See Nasdaq ISE LLC (``Nasdaq ISE'') Pricing Schedule 
Section 3. (Regular Order Fees and Rebates). Under the ISE Fee 
Schedule, a Responder to a Facilitation or Solicitation Order will 
pay $0.50 in Penny Interval Classes and $1.10 for Non-Penny Interval 
Classes. The Exchange notes that Nasdaq ISE does not offer Strategy 
Order Facilitation and Solicitation transactions on their exchange.
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    The Exchange believes it is reasonable, equitable and not unfairly 
discriminatory to charge higher exchange fees for responders in the 
Strategy Order Facilitation and Solicitation mechanisms than for 
initiators of these orders and the contra orders. The Exchange believes 
it is reasonable when compared to a similar practice for fees at a 
competing venue.\18\ For example, at Nasdaq ISE the fee for both the 
initiating and contra order for Crossing Orders \19\ (except PIM Orders 
which are assessed different fees under Nasdaq ISE's fee schedule) is 
$0.20 for Select and Non-Select Symbols for all

[[Page 7134]]

account types except Priority Customers who are charged no fees. 
Responses to these orders are charged $0.50 for Select Symbols and 
$1.10 for Non-Select Symbols regardless of account type. The Exchange 
notes that a differential of fees between initiators and responders 
currently exists in the Facilitation and Solicitation auction 
mechanisms which, as discussed above, are the same mechanisms that the 
Strategy Order Facilitation and Solicitation transactions are 
submitted. Further, the Exchange continues to believe that the proposed 
differential is reasonable because responders to Strategy Order 
Facilitation and Solicitation orders are willing to pay a higher fee 
for liquidity discovery. Responders to these orders are given the 
opportunity to interact with customer order flow which, in turn, allows 
for the opportunity for increased executions on the Exchange thus 
benefitting all market participants. The Exchange also believes it is 
reasonable and appropriate to charge initiators of Strategy Order 
Facilitation and Solicitation Orders less than responders because 
initiators bring liquidity to the Exchange which, in turn, results in 
increased opportunity for more executions on BOX. As such, the Exchange 
believes the differential is reasonable and appropriate.
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    \18\ Id.
    \19\ On Nasdaq ISE, a Crossing Order is an order executed in the 
Exchange's Facilitation Mechanism, Solicited Order Mechanism, Price 
Improvement Mechanism or submitted as a Qualified Contingent Cross 
order.
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    The Exchange believes the proposed Strategy Order Facilitation and 
Solicitation Break-Up Credits are reasonable, equitable, and not 
unfairly discriminatory. Currently, in the Facilitation and 
Solicitation auction mechanisms, the Agency Order is a block sized 
order typically composed of Public Customer orders and represented by 
an Order Flow Provider who then guarantees the execution by submitting 
a matching Facilitation and Solicitation Order. Responders in the 
Facilitation and Solicitation auction mechanisms are always non-Public 
Customers and more typically are Market Makers. The Exchange believes 
that it is reasonable, equitable and not unfairly discriminatory to 
give the Agency Orders the proposed Break-Up Credit when their orders 
execute against a non-Public Customer because the Exchange seeks to 
attract additional Public Customer order flow which may ultimately 
benefit all Participants trading on the Exchange. Further, the Exchange 
notes that the same behavior currently exists for regular orders 
submitted through the Facilitation and Solicitation auction mechanisms. 
As such, the Exchange believes the proposed Break-Up Credits for 
Strategy Order Facilitation and Solicitation Orders is reasonable and 
appropriate. Further, the Exchange believes the proposed change is 
equitable and not unfairly discriminatory as it will apply to all 
Participants, regardless of account type.
    Finally, the Exchange believes that the proposed non-substantive 
changes to the Fee Schedule to reflect the changes discussed herein are 
reasonable, equitable, and not unfairly discriminatory as the changes 
will increase readability and reduce investor confusion.

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 the proposed changes to the Primary 
Improvement Order fees will not impose a burden on competition among 
various Exchange Participants. The Exchange is simply proposing to 
amend certain percentage thresholds and fees for Primary Improvement 
Orders in the BOX Fee Schedule. The Exchange believes that the proposed 
changes increase intermarket and intramarket competition by incenting 
Participants to direct their order flow to the Exchange, which benefits 
all Participants by providing more trading opportunities and improves 
competition on the Exchange.
    The Exchange does not believe the proposed changes to the PIP and 
COPIP Transactions fee structure will burden competition by creating 
such a disparity between the fees an initiating Participant in the PIP 
and COPIP auction pay and the fees a competitive responder pays that 
would result in certain Participants being unable to compete with 
initiators. In fact, the Exchange believes that these changes will not 
impair these Participants from adding liquidity and competing in PIP 
and COPIP auction transactions. The Exchange believes it will help 
promote competition by providing incentives for market participants to 
submit customer order flow to BOX and thus, create a greater 
opportunity for customers to receive additional price improvement and 
access greater liquidity. Further, as discussed above, the Exchange is 
simply seeking to relocate certain fees and credits already applied to 
these transactions on BOX. As such, the Exchange does not believe the 
proposed changes to Section I.B. of the BOX Fee Schedule will impose 
any burden on competition not necessary or appropriate in furtherance 
of the purposes of the Act.
    Similarly, the Exchange does not believe the proposed changes to 
the Facilitation and Solicitation Transactions fee structure will 
burden competition by creating such a disparity between the fees an 
initiating Participant in the Facilitation and Solicitation auction pay 
and the fees a competitive responder pays that would result in certain 
Participants being unable to compete with initiators. In fact, the 
Exchange believes that these changes will not impair these Participants 
from adding liquidity and competing in Facilitation and Solicitation 
auction transactions and will help promote competition by providing 
incentives for market participants to submit customer order flow to BOX 
and thus, create a greater opportunity for customers to receive 
additional price improvement. Further, as discussed above, the Exchange 
is simply seeking to relocate certain fees and credits already applied 
to these transactions on BOX. As such, the Exchange does not believe 
the proposed changes to Section I.C. and Section I.C.2. of the BOX Fee 
Schedule will impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of the Act.
    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing venues. 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 \20\ and Rule 19b-4(f)(2) 
thereunder,\21\ because it establishes or changes a due, or fee.
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    \20\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \21\ 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

[[Page 7135]]

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-2021-01 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-2021-01. 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-2021-01, and should be submitted on 
or before February 16, 2021.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\22\
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    \22\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2021-01585 Filed 1-25-21; 8:45 am]
BILLING CODE 8011-01-P