Document ID: SEC-2023-0900-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Exchange LLC
Posted Date: 2023-08-21T04:00Z

[Federal Register Volume 88, Number 160 (Monday, August 21, 2023)]
[Notices]
[Pages 56895-56899]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-17859]

[[Page 56895]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-98139; File No. SR-BOX-2023-22]

Self-Regulatory Organizations; BOX Exchange LLC; Notice of Filing 
and Immediate Effectiveness of a Proposed Rule Change To Update and 
Amend IM-7240-1 Regarding Complex Order and Multi-Leg Price Protections

August 15, 2023.
    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 August 7, 2023, BOX Exchange LLC (the ``Exchange'') filed with 
the Securities and Exchange Commission (the ``Commission'') the 
proposed rule change as described in Items I and II below, which Items 
have been prepared by the Exchange. The Exchange filed the proposed 
rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and 
Rule 19b-4(f)(6) thereunder.\4\ 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)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to update and amend IM-7240-1 regarding 
Complex Order \5\ and Multi-Leg price protections. 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 https://rules.boxexchange.com/rulefilings.
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    \5\ The term ``Complex Order'' means any order involving the 
simultaneous purchase and/or sale of two or more different options 
series in the same underlying security, for the same account, in a 
ratio that is equal to or greater than one-to-three (.333) and less 
than or equal to three-to-one (3.00) and for the purpose of 
executing a particular investment strategy. See BOX Rule 7240(a)(7).
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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 self-regulatory organization 
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 self-regulatory organization 
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 purpose of the proposed rule change is twofold: first, to amend 
IM-7240-1(a) to include Multi-Leg Orders; \6\ and second, to make 
certain price protections voluntary for Complex Qualified Open Outcry 
(``QOO'') Orders and multi-leg QOO Orders. In May 2018, BOX adopted 
protections for Complex Orders.\7\ Multi-leg QOO Orders were added to 
the Trading Floor in February of 2019.\8\ At that time, the Complex 
Order protections in IM-7240-1(a) were designed to apply to multi-leg 
QOO Orders, however, IM-7240-1(a) was not updated accordingly. The 
Exchange now proposes to update IM-7240-1 to explicitly include multi-
leg QOO Orders in IM-7240-1(a) to accurately describe system 
functionality. The Exchange notes that IM-7240-1 includes both the 
debit/credit check and maximum price protections. At present, debit/
credit check in IM-7240-1(a) applies to both Complex Orders and Multi-
Leg Orders and maximum price in IM-7240-1(b) applies to Complex Orders 
but not to Multi-Leg Orders because maximum price only applies to true 
butterfly spreads, vertical spreads, and box spreads which have ratios 
that are equal to or greater than one-to-three and less than or equal 
to three-to-one and by definition are always Complex Orders.\9\
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    \6\ The term ``Multi-Leg Order'' means any order involving the 
simultaneous purchase and/or sale of two or more different options 
series in the same underlying security, for the same account, and 
for the purpose of executing a particular investment strategy in a 
ratio that is less than one-to-three (.333) or greater than three-
to-one (3.00). See BOX Rule 7240(a)(10).
    \7\ See Securities and Exchange Act Release No. 83163 (May 3, 
2018), 83 FR 21320 (May 9, 2018) (SR-BOX-2018-13) (Notice of 
Immediate Effectiveness of a Proposed Rule Change to Adopt Price 
Protections for Complex Orders).
    \8\ See Securities and Exchange Act Release No. 85052 (February 
5, 2019), 84 FR 3265 (February 11, 2019) (SR-BOX-2019-01) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change to 
Clarify That Multi-leg Qualified Open Outcry Orders are Permitted on 
the BOX Trading Floor).
    \9\ A true butterfly spread has a ratio of two-to-one while 
vertical spreads and box spreads have a leg ratio of one-to-one. As 
noted above, a Complex Order means any order involving the 
simultaneous purchase and/or sale of two or more different options 
series in the same underlying security, for the same account, in a 
ratio that is equal to or greater than one-to-three (.333) and less 
than or equal to three-to-one (3.00) and for the purpose of 
executing a particular investment strategy. See BOX Rule 7240(a)(7). 
Further, a Multi-Leg Order means any order involving the 
simultaneous purchase and/or sale of two or more different options 
series in the same underlying security, for the same account, and 
for the purpose of executing a particular investment strategy, in a 
ratio that is less than one-to-three (.333) or greater than three-
to-one (3.00). See BOX Rule 7240(a)(10).
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    As background, BOX implemented a debit/credit check which helps 
prevent the execution of Complex Orders at erroneous prices.\10\ 
Specifically, under the debit/credit check, the system will reject a 
Complex Limit Order for a credit strategy with a net debit price or a 
Complex Limit Order for a debit strategy with a net credit price. The 
debit/credit check mechanism is designed to value strategies using 
principles that are based on theoretical models used to value options. 
Such models take into account variables such as current market price, 
strike price, and time to expiration. All else equal, longer-dated 
options are more valuable because of their greater time to expiration. 
Additionally, holding everything constant, including expiration date, a 
put option with a higher strike price will be more valuable than a put 
option with a lower strike price because the higher strike price allows 
the holder to sell the underlying security at a higher price. 
Conversely, a call option with a lower strike price is more expensive 
than a call option with a higher strike price because the lower strike 
price allows the holder to buy the underlying security at a lower 
price. Taking these principles into account, BOX designed the debit/
credit check as a way to identify strategies as credit or debit and 
only accept appropriate prices based on that determination.
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    \10\ See BOX IM-7240-1(a) (Debit/Credit Check).
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    In addition to the debit/credit check, the system will also 
calculate a maximum price for true butterfly spreads, vertical spreads, 
and box spreads. After calculating the maximum price, the system will 
reject a Complex Limit Order that is a true butterfly spread, vertical 
spread, or a box spread if the absolute value of the Complex Order's 
limit price is greater than the maximum price. For a Complex Market 
Order that is a true butterfly spread, vertical spread, or a box 
spread, the system will reject the Complex Market Order if the absolute 
value of the execution price is greater than the maximum price. The 
maximum price value is calculated by adding a price buffer to the 
absolute value of a true butterfly spread, vertical spread, or box 
spread.\11\
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    \11\ See BOX IM-7240-1(b) (Maximum Price).
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    The Exchange notes that the principals [sic] drawn from theoretical 
models used to value options do not take into account bid to ask 
spreads and other factors that may influence the

[[Page 56896]]

prices at which Participants \12\ trade options. For example, 
Participants may need to close positions to reduce risk or to reduce 
margin requirements and, in such cases, may be less sensitive to prices 
of individual options. Further, Participants may believe that market 
conditions warrant trades that would otherwise be rejected by BOX. The 
Exchange believes that Participants make this determination based on 
their own theoretical models, positions, and evaluation of market 
conditions. As described further below, the Exchange's proposal is 
designed to allow Participants to make this determination on a per 
order basis based on their internal evaluations of relevant factors.
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    \12\ See BOX Rule 100(a)(42).
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    The Exchange now proposes to amend IM-7240-1(a) to explicitly 
include Multi-Leg Orders and to make the debit/credit check voluntary 
for Complex QOO Orders and multi-leg QOO Orders and [sic] maximum price 
in IM-7240-1(b) voluntary for Complex QOO Orders on the BOX Trading 
Floor.\13\ Specifically, the Exchange is proposing to clarify system 
functionality by explicitly including Multi-Leg Orders within the 
debit/credit check, and to add an exception whereby both Complex QOO 
Orders and multi-leg QOO Orders may be excluded from the debit/credit 
check on a per order basis. Additionally, the Exchange is proposing to 
add an exception to maximum price to exclude Complex QOO Orders on a 
per order basis. The Exchange notes that even when the debit/credit 
check and maximum price are not applied to an order, Floor Brokers \14\ 
will evaluate the price of an order based on then-existing market 
conditions prior to submitting the order to the Trading Host for 
execution. The debit/credit check will apply to Complex QOO Orders and 
multi-leg QOO Orders and maximum price will apply to Complex QOO Orders 
by default unless Participants elect otherwise on a per order basis. 
Specifically, when submitting an order, there is an optional tag to 
disable the debit/credit check and maximum price, if the tag is not 
populated then the debit/credit check and maximum price will apply by 
default. Although Participants who voluntarily choose not to apply the 
debit/credit check and maximum price do not have the benefit of such 
protections, there is still an opportunity for Floor Brokers to detect 
any errors resulting in minimal risk of execution at an erroneous 
price. Additionally, the Exchange notes that Complex QOO Orders will 
still be executed at a price that is equal to or better than the BOX 
BBO for each component series and executed at a price that is equal to 
or better than the Extended cNBBO \15\ for the Complex Order Strategy 
and that each component series of a multi-leg QOO Order must be 
executed at a price that is equal to or better than the NBBO for that 
series subject to the exceptions of Rule 15010(b).\16\ The Exchange 
notes that the NBBO aspect of the Complex QOO Order filter may be 
disabled on an order by order basis by a Floor Broker executing Complex 
QOO Orders.\17\ Lastly, the Exchange notes that Participants have 
expressed that the current application of these protections is too 
restrictive and prevents executions that would be allowed to execute on 
competing exchanges.\18\ The Exchange believes that other exchanges do 
not apply similar protections on their trading floors.\19\ As such, 
Participants have requested this flexibility for their Complex QOO 
Orders and multi-leg QOO Orders because of instances when a Participant 
order was rejected on BOX due to debit/credit check or maximum price, 
the Participant still desires to execute the order, and sends the order 
to another exchange where such orders are allowed to execute.
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    \13\ The Exchange notes that the price protections discussed 
herein cannot be waived for electronic orders.
    \14\ See BOX Rule 7540.
    \15\ The term ``Extended cNBBO'' means the maximum permissible 
net bid and offer execution price for a Complex Order Strategy. See 
BOX Rule 7240(a)(5).
    \16\ See BOX Rules 7240(b)(3)(iii) and 7600(c).
    \17\ See BOX Rule 7240(b)(3)(iii).
    \18\ See NYSE Arca, Inc. (``NYSE Arca'') Rule 6.91P-O (providing 
Complex Strategy Protections for Electronic Complex Orders but not 
for open outcry orders) and Cboe Exchange, Inc. (``CBOE'') Rule 
5.34(b)(3) and Securities and Exchange Act Release No. 80439 (April 
12, 2017), 82 FR 18320 (April 18, 2017) (SR-CBOE-2017-031) 
(providing that debit/credit price reasonability checks do not apply 
to orders routed through its PAR workstation and order management 
terminal).
    \19\ Id.
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    Lastly, the Exchange proposes to remove the word ``regular'' in IM-
7240-1(a)(5) and IM-7240-1(b)(5). The Exchange believes the use of the 
word may cause confusion and is unnecessary, and, as such, believes 
that removing it will provide clarity within the rule text.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Securities Exchange Act of 1934 
(the ``Act''),\20\ in general, and Section 6(b)(5) of the Act,\21\ in 
particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in facilitating transactions in securities, to remove 
impediments to and perfect the mechanism of a free and open market and 
a national market system, and, in general to protect investors and the 
public interest. In particular, amending IM-7240-1(a) to include Multi-
Leg Orders aligns the Exchange's rules with current system 
functionality and accurately describes the application of the 
protections in IM-7240-1(a). The Exchange believes that codifying the 
inclusion of Multi-Leg Orders in IM-7240-1(a) will ensure the rulebook 
accurately reflects the operation of the Exchange's rules and, 
therefore, the proposed rule change reduces potential investor or 
market participant confusion. Additionally, this amendment is designed 
to provide Participants with greater certainty about how Complex Order 
and Multi-Leg Order price protections are applied to their orders. 
Further, the Exchange believes applying the protections in IM-72401(a) 
to Multi-Leg Orders helps prevent Multi-Leg Orders from executing at 
erroneous prices.
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    \20\ 15 U.S.C. 78f(b).
    \21\ 5 U.S.C. 78f(b)(5).
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    The Exchange believes further that allowing the debit/credit check 
to be voluntary for Complex QOO Orders and multi-leg QOO Orders and 
maximum price to be voluntary for Complex QOO Orders will provide 
flexibility for investors to enter Complex QOO Orders and multi-leg QOO 
Orders which otherwise may have been rejected due to the debit/credit 
check and maximum price even though such orders may have been designed 
to meet investors' investment objectives. The election to forgo the 
debit/credit check and maximum price will only be allowed on the BOX 
Trading Floor because Floor Brokers will have an opportunity to 
evaluate the price of an order based on then-existing market conditions 
prior to submitting the order to the BOX Trading Host for execution, 
resulting in minimal risk of execution at an erroneous price. For 
example, Floor Brokers may communicate with their clients to determine 
whether an order was intended to be priced as a debit or as a credit or 
may be aware of the market conditions influencing a client to price an 
order as a debit or as a credit. The debit/credit check will apply to 
Complex QOO Orders and multi-leg QOO Orders and maximum price will 
apply to Complex QOO Orders by default unless Participants elect 
otherwise on a per order basis. The Exchange notes that Complex QOO

[[Page 56897]]

Orders will still be executed at a price that is equal to or better 
than the BOX BBO for each component series and executed at a price that 
is equal to or better than the Extended cNBBO for the Complex Order 
Strategy and that each component series of a multi-leg QOO Order must 
be executed at a price that is equal to or better than the NBBO for 
that series subject to the exceptions of Rule 15010(b).\22\ The 
Exchange notes further that the NBBO aspect of the Complex QOO Order 
filter may be disabled on an order by order basis by a Floor Broker 
executing Complex QOO Orders.\23\ Thus, the Exchange believes that 
allowing the debit/credit check to be voluntary only for Complex QOO 
Orders and multi-leg QOO Orders and maximum price to be voluntary for 
Complex QOO Orders removes impediments to and perfects the mechanism of 
a free and open market and a national market system, and, in general 
protects investors and the public interest.
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    \22\ See supra note 14.
    \23\ See supra note 15.
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    The Exchange notes that other exchanges do not currently apply 
Complex Order price protections similar to the debit/credit check in 
open outcry trading.\24\ In particular, the NYSE Arca Rule titled 
Electronic Complex Order (``ECO'') Trading provides for ECO Risk 
Checks, including Complex Strategy Protections.\25\ The Exchange 
believes that NYSE Arca's Complex Strategy Protections only apply to 
electronic orders and not to open outcry orders because ECO Risk Checks 
specifically apply to a Complex Order that is submitted electronically 
to NYSE Arca.\26\ BOX, on the other hand, currently applies the debit/
credit check to Complex QOO Orders and multi-leg QOO Orders and maximum 
price to Complex QOO Orders which are executed on the BOX Trading 
Floor. The proposal herein will make debit/credit voluntary for Complex 
QOO Orders and multi-leg QOO Orders and maximum price voluntary for 
Complex QOO Orders such that Participants may choose to execute certain 
Complex QOO Orders and multi-leg QOO Orders on the BOX Trading Floor. 
The Exchange believes that the proposal herein would allow certain 
Complex Orders that are currently allowed in open outcry on NYSE Arca 
to also be allowed on the BOX Trading Floor as Complex QOO Orders.
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    \24\ See supra note 16. [sic]
    \25\ See NYSE Arca Rule 6.91P-O(g)(3). ``'Electronic Complex 
Order' or `ECO' means a Complex Order . . . that is submitted 
electronically to the Exchange.'' See NYSE Arca Rule 6.91P-O(a)(7). 
NYSE Arca's Complex Strategy Protections protect participants with 
the expectation that an order will receive (or pay) a net premium 
but prices the ECO such that the ECO sender will instead pay (or 
receive) a net premium. These protections apply to ``all buy'' or 
``all sell'' strategies, vertical spreads, and calendar spreads. The 
Exchange notes that the debit/credit check in IM-7240-1 includes 
``all buy'' and ``all sell'' strategies, Vertical spreads and 
Calendar spreads. The Exchange also notes that NYSE Arca Rule 6.91P-
O does not include maximum price protections.
    \26\ NYSE Arca Rule 6.91P-O(a)(7) by its terms is applicable to 
electronic orders but not to open outcry orders.
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    The Exchange notes that CBOE also has debit/credit price 
reasonability checks which do not apply to orders routed through its 
PAR workstation and order management terminal (``OMT''), which are 
subject to manual handling.\27\ As such, CBOE does not apply debit/
credit price reasonability checks to some of the orders subject to 
manual handling.\28\ Specifically, a PAR or OMT operator evaluates the 
price of an order based on then-existing market conditions prior to 
submitting it for electronic execution, thus minimizing the risk of an 
erroneous execution and reducing the need for application of additional 
price checks. Similarly, the Exchange proposes to make the debit/credit 
check voluntary for Complex QOO Orders and multi-leg QOO Orders.
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    \27\ See Securities and Exchange Act Release No. 80439 (April 
12, 2017), 82 FR 18320 (April 18, 2017) (SR-CBOE-2017-031).
    \28\ The Exchange notes that CBOE Rule 5.34(b)(4) titled ``Buy 
Strategy Parameters'' does not apply to orders auctioned via PAR and 
OMT whereas Rule 5.34(b)(5) titled ``Maximum Value Acceptable Price 
Range'' does apply to such orders. The Exchange notes further that 
the proposed rules determine whether a Complex Order is debit or 
credit by using a slightly different process than that employed by 
CBOE. Specifically, other than for call and put butterfly spreads, 
CBOE will group the legs of a Complex Order into pairs and compare 
multiple pairs to determine whether the Complex Order is a credit or 
debit while the Exchange creates groups (which may include more than 
two legs) based on expiration date. However, the ultimate 
determination of whether a Complex Order is a debit or credit is 
similar under the different processes. Therefore, the Exchange 
believes the debit/credit check is similar to CBOE's Debit/Credit 
Price Reasonability Checks. See CBOE Rule 5.34(b)(3).
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    The Exchange believes that the proposed changes strike a balance 
between providing adequate risk controls and flexibility so that 
Participants may execute their intended strategies. Specifically, the 
Exchange believes that investors will have the added flexibility of 
executing Complex QOO Orders and multi-leg QOO Orders at prices of 
their choosing while still benefiting from Floor Brokers' handling of 
orders. Additionally, the Exchange notes that the proposed changes will 
provide Participants with another venue to execute certain Complex 
Orders and Multi-Leg Orders that would otherwise be rejected by BOX but 
accepted on another exchange.
    Lastly, the Exchange believes that the proposed change to remove 
the word ``regular'' in IM-7240-1(a)(5) and IM-7240-1(b)(5) will 
provide clarity within the rule text and will reduce potential investor 
or market participant 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 that is not necessary or appropriate 
in furtherance of the purposes of the Act. The Exchange believes that, 
amending IM-7240-1(a) to include Multi-Leg Orders does not impose any 
burden on intramarket competition as the change will apply in the same 
manner to all Participants. Further, the inclusion of Multi-Leg Orders 
in IM-7240-1(a) does not impose a burden on intermarket competition as 
the change simply intends to align the Exchange's rules with current 
system functionality and accurately describe the application of the 
protections in IM-7240-1(a). The Exchange does not believe the proposed 
rule change will impose any burden on intramarket competition, as the 
proposed rule change will apply in the same manner to all Participants. 
The Exchange notes that debit/credit check applies to Complex Orders 
and Multi-Leg Orders and maximum price to Complex Orders of all 
Participants, regardless of account type. Additionally, all 
Participants will have the ability to opt out of the debit/credit check 
for Complex QOO Orders and multi-leg QOO Orders and maximum price for 
Complex QOO Orders on a per order basis. Further, the proposed rule 
change will provide all Participants with the ability to execute 
certain Complex QOO Orders and multi-leg QOO Orders on BOX that 
previously were not allowed. The Exchange believes the proposed rule 
change does not impose any undue burden on intermarket competition and 
may, on the contrary, promote competition, as other exchanges currently 
apply similar protections while allowing certain orders to execute in 
open outcry on their respective trading floors.\29\ As such, 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.
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    \29\ See supra note 16. [sic]

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[[Page 56898]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change does not (a) 
significantly affect the protection of investors or the public 
interest; (b) impose any significant burden on competition; and (c) 
become operative for 30 days from the date on which it was filed, or 
such shorter time as the Commission may designate, it has become 
effective pursuant to Section 19(b)(3)(A) of the Act \30\ and Rule 19b-
4(f)(6) thereunder.\31\
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    \30\ 15 U.S.C. 78s(b)(3)(A).
    \31\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires a self-regulatory organization to give the Commission 
written notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at 
least five business days prior to the date of filing of the proposed 
rule change, or such shorter time as designated by the Commission. 
The Exchange has satisfied this requirement.
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\32\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay. The Exchange states 
that amending the debit/credit check in IM-7240-1(a) to include Limit 
Multi-Leg Orders will help to prevent Limit Multi-Leg Orders from 
executing at erroneous prices and help to ensure the accuracy of the 
Exchange's rules. The Exchange states that amending IM-7240-1 to make 
the debit/credit check voluntary for Complex QOO Orders and Multi-Leg 
QOO Orders and to make the maximum price protection voluntary for 
Complex QOO Orders will provide BOX Participants with flexibility in 
executing their Complex QOO Orders and Multi-Leg QOO Orders. As 
discussed above, the Exchange states that Participants that need to 
close positions to reduce risk or margin requirements may be less 
sensitive to the prices of individual options. The Exchange further 
states that Participants may believe, based on their own theoretical 
models and positions, that market conditions warrant trades that would 
otherwise be rejected by the Exchange. Under the proposal, the debit/
credit check and the maximum price protection will continue to apply by 
default unless a Participant elects to forgo on a per order basis. 
Because the waiver will available only for orders traded in open 
outcry, but not for orders traded electronically, a Floor Broker will 
evaluate the price of the Complex QOO or Multi-Leg QOO Order based on 
then-existing market conditions prior to submitting the order to the 
Trading Host for execution, which the Exchange states will result in 
minimal risk of the order executing at an erroneous price. The Exchange 
further states that other options exchanges do not apply similar 
protections to orders executed on their trading floors, and that 
Participants have indicated that the current application of the debit/
credit check and the maximum price protection is too restrictive and 
prevents executions that would be permitted on other options 
exchanges.\33\ The Exchange states that deleting the word ``regular'' 
from IM-7240-1(a)(5) and IM-7240-1(b)(5) will help to clarify the 
Exchange's rules by removing an unnecessary and potentially confusing 
word from the Exchange's rules.
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    \32\ 17 CFR 240.19b-4(f)(6)(iii).
    \33\ See notes 24-28, supra, and accompanying text.
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    The Commission finds that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest. 
The proposal will allow Participants to elect to waive the debit/credit 
check for Complex QOO Orders and Multi-Leg QOO Orders, and the maximum 
price protection for Complex QOO Orders, on an order-by-order basis. As 
discussed above, the Exchange states that Participants seek the 
flexibility to execute Complex QOO Orders and Multi-Leg QOO Orders at 
prices that the Exchange would otherwise reject. The Commission 
believes that the proposal will provide Participants with flexibility 
in executing Complex QOO and Multi-Leg QOO Orders that meet their 
investment objectives. Under the proposal, the debit/credit check and 
the maximum price protection will continue to apply by default, and 
Participants will have the ability to waive the protections on a per 
order basis. Because the waiver will be available only for Complex QOO 
and Multi-Leg QOO Orders traded in open outcry, but not for orders 
traded electronically, a Floor Broker will be able to evaluate the 
price of the Complex QOO or Multi-Leg QOO Order before submitting the 
order to the Trading Host for execution, which the Exchange believes 
will minimize the risk of a Complex QOO or Multi-Leg QOO Order 
executing at an erroneous price. The proposal to apply the debit/credit 
check to Limit Multi-Leg Orders should protect investors by helping to 
prevent Limit Multi-Leg Orders from executing at potentially erroneous 
prices. The proposal to delete the unnecessary word ``regular'' from 
IM-7240-1 should eliminate potential confusion and help to clarify the 
Exchange's rules. For these reasons, the Commission designates the 
proposal operative upon filing.\34\
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    \34\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of 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-2023-22.

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-2023-22. 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

[[Page 56899]]

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 a.m. and 3 p.m. Copies of the 
filing also will be available for inspection and copying at the 
principal office of the Exchange. Do not include personal identifiable 
information in submissions; you should submit only information that you 
wish to make available publicly. We may redact in part or withhold 
entirely from publication submitted material that is obscene or subject 
to copyright protection. All submissions should refer to file number 
SR-BOX-2023-22 and should be submitted on or before September 11, 2023.
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    \35\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\35\
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2023-17859 Filed 8-18-23; 8:45 am]
BILLING CODE 8011-01-P