Document ID: SEC-2016-1433-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange, LLC
Posted Date: 2016-08-15T04:00Z

[Federal Register Volume 81, Number 157 (Monday, August 15, 2016)]
[Notices]
[Pages 54147-54149]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-19319]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78514; File No. SR-BOX-2016-38]

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 (``BOX'') Options Facility

August 9, 2016.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on July 29, 2016, BOX Options Exchange LLC (the ``Exchange'') 
filed with the Securities and Exchange Commission (``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the Exchange. The Exchange filed the 
proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ 
and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to

[[Page 54148]]

solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange is filing with the Securities and Exchange Commission 
(``Commission'') a proposed rule change to amend the Fee Schedule to 
adjust certain fees in Section I.B. of the BOX 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 August 1, 2016. The text of the 
proposed rule change is available from the principal office of the 
Exchange, at the Commission's Public Reference Room and also on the 
Exchange's Internet Web site at http://boxexchange.com.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange has prepared summaries, set forth in 
Sections A, B, and C below, of the most significant aspects of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the Fee Schedule for trading on BOX 
to adjust certain fees in Section I.B. of the BOX Fee Schedule.
Exchange Fees
Primary Improvement Order
    Under the tiered fee schedule for Primary Improvement Orders, the 
Exchange assesses a per contract execution fee to all Primary 
Improvement Order executions initiated by the particular Initiating 
Participant. Percentage thresholds are calculated on a monthly basis by 
totaling the Initiating Participant's Primary Improvement Order volume 
submitted to BOX, relative to the total national Customer volume in 
multiply-listed options classes. The Exchange proposes to adjust the 
fee assessed in Tier 5. Specifically, the Exchange proposes to reduce 
the fee to $0.02 from $0.05. The Exchange notes that it is not 
proposing any changes to the percentage thresholds and the quantity 
submitted will continue to be calculated on a monthly basis by totaling 
the Initiating Participant's Primary Improvement Order volume submitted 
to BOX, relative to the total national Customer volume in multiply-
listed options classes.
BOX Volume Rebate (``BVR'')
    Next, the Exchange proposes to adjust a rebate within the BVR. 
Under the BVR, the Exchange offers a tiered per contract rebate for all 
PIP Orders and COPIP orders of 100 contracts and under. Percentage 
thresholds are calculated on a monthly basis by totaling the 
Participant's PIP and COPIP volume submitted to BOX, relative to the 
total national Customer volume in multiply-listed options classes. The 
Exchange proposes to increase the rebate in Tier 5 for PIP Orders to 
$0.12 from $0.10. The Exchange notes that it is not proposing any 
changes to the percentage thresholds and the quantity submitted will 
continue to be calculated on a monthly basis by totaling the 
Participant's PIP and COPIP volume submitted to BOX, relative to the 
total national Customer volume in multiply-listed options classes.
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,\5\ 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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    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that reducing the Primary Improvement Order 
fee to $0.02 for Initiating Participants who reach Tier 5 is 
reasonable, equitable and not unfairly discriminatory. The reduced fee 
is equitable and not unfairly discriminatory as it is available to all 
BOX Options Participants that initiate Auction Transactions, and they 
may choose whether or not to take advantage of the discounted fees. The 
Exchange believes that the proposed fee remains reasonable and 
competitive when compared to the auction transaction fees on other 
exchanges.\6\
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    \6\ Comparative fees at other exchanges range from $0.05 to 
$0.20. See Section IV of the Phlx Pricing Schedule entitled ``PIXL 
Pricing''; International Securities Exchange (``ISE'') Schedule of 
Fees, Section I. Regular Order Fees and Rebates ``Select Symbols.''
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    The Exchange also believes the proposed change to the BVR in 
Section I.B. of the BOX Fee Schedule is reasonable, equitable and not 
unfairly discriminatory. The BVR was adopted to attract Public Customer 
order flow to the Exchange by offering these Participants incentives to 
submit their PIP and COPIP Orders to the Exchange and the Exchange 
believes it is appropriate to now amend a specific rebate within the 
BVR. The Exchange believes it is equitable and not unfairly 
discriminatory to amend the BVR, as all Participants have the ability 
to qualify for a rebate, and rebates are provided equally to qualifying 
Participants at each tier. Finally, the Exchange believes it is 
reasonable and appropriate to continue to provide incentives for Public 
Customers, which will result in greater liquidity and ultimately 
benefit all Participants trading on the Exchange. Other exchanges 
employ similar incentive programs;\7\ and the Exchange believes that 
the proposed change is reasonable and competitive when compared to 
incentive fees at other exchanges.
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    \7\ 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).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange is simply 
proposing to amend certain fees and rebates for Auction Transactions 
within the BOX Fee Schedule. The Exchange believes that the volume 
based rebates and fees 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.

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 \8\ and

[[Page 54149]]

Rule 19b-4(f)(2) thereunder,\9\ because it establishes or changes a 
due, or fee.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
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    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend the rule 
change if it appears to the Commission that the action is necessary or 
appropriate in the public interest, for the protection of investors, or 
would otherwise further the purposes of the Act. If the Commission 
takes such action, the Commission shall institute proceedings to 
determine whether the proposed rule should be approved or disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-BOX-2016-38 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-BOX-2016-38. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room, 100 F Street, NE., 
Washington, DC 20549 on official business days between the hours of 
10:00 a.m. and 3:00 p.m. Copies of such filing also will be available 
for inspection and copying at the principal office of the Exchange. All 
comments received will be posted without change; the Commission does 
not edit personal identifying information from submissions. You should 
submit only information that you wish to make available publicly. All 
submissions should refer to File Number SR-BOX-2016-38, and should be 
submitted on or before September 6, 2016.
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    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-19319 Filed 8-12-16; 8:45 am]
 BILLING CODE 8011-01-P