Document ID: SEC-2020-0798-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Exchange LLC
Posted Date: 2020-05-21T04:00Z

[Federal Register Volume 85, Number 99 (Thursday, May 21, 2020)]
[Notices]
[Pages 31010-31012]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-10934]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-88889; File No. SR-BOX-2020-15]

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 (``BOX'') Facility To Remove the 
Pricing Changes That Were in Effect While the Trading Floor Was 
Inoperable

May 15, 2020.
    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 May 12, 2020, BOX Exchange LLC (the ``Exchange'') filed with 
the Securities and Exchange Commission (``Commission'') the proposed 
rule change as described in Items I, II, and III below, which Items 
have been prepared by the Exchange. The Exchange filed the proposed 
rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 
19b-4(f)(2) thereunder,\4\ which renders the proposal effective upon 
filing with the Commission. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the 
Substance of the Proposed Rule Change

    The Exchange is filing with the Securities and Exchange Commission 
(``Commission'') a proposed rule change to amend the Fee Schedule 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 
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
    As a precautionary measure to prevent the potential spread of 
coronavirus (COVID-19), BOX Exchange LLC (BOX) temporarily closed the 
Trading Floor in Chicago after the close of business on Friday, March 
20, 2020. As a result, BOX filed a fee change to govern certain pricing 
changes to be in effect while the BOX Trading Floor was inoperable.\5\ 
On April 29, 2020, BOX announced that the BOX Trading Floor located in 
Chicago, Illinois will reopen on Monday, May 4, 2020. As such, BOX now 
proposes to remove the pricing changes that were in effect while the 
Trading Floor was inoperable. Specifically, the Exchange will remove 
the following language and corresponding chart from Section 1.C from 
Fee Schedule:
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    \5\ See Securities Exchange Act Release No. 88559 (April 3, 
2020), 85 FR 19968 (April 9, 2020) (SR-BOX-2020-08).
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     ``Participants will be assessed the following fees for 
Facilitation and Solicitation Transactions in lieu of those described 
in the preceding table when the BOX Trading Floor is inoperable. The 
Facilitation and Solicitation Transaction Rebate identified in Section 
I.C.1 will not apply when the BOX Trading Floor is inoperable.''

[[Page 31011]]

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                                                                   Agency Order                Facilitation Order or       Responses in the Solicitation
                                                         --------------------------------       Solicitation Order            or Facilitation Auction
                                                                                         --------------------------------           Mechanisms
                      Account type                          Penny Pilot      Non-Penny                                   -------------------------------
                                                              classes      Pilot classes    Penny Pilot      Non-Penny      Penny Pilot      Non-Penny
                                                                                              classes      Pilot classes      classes      Pilot classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Public Customer.........................................           $0.00           $0.00           $0.00           $0.00           $0.50           $1.15
Professional Customer or Broker Dealer..................            0.00            0.00            0.00            0.00            0.50            1.15
Market Maker............................................            0.00            0.00            0.00            0.00            0.50            1.15
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    In addition, the Exchange will remove the following language from 
Section III.B from the Fee Schedule:
     ``Participants will not be assessed Liquidity Fees and 
Credits for Facilitation and Solicitation Transactions when the BOX 
Trading Floor is inoperable.''
    Lastly, the Exchange will remove the following language from 
Section IX. From the Fee Schedule:
     ``BOX Participant Fees will not be assessed for Trading 
Floor-only Participants and Trading Floor Permit Fees will not be 
assessed for any Participant while the BOX Trading Floor is 
inoperable.''
    The Exchange notes that the previously effective fees and rebates 
that were in place prior to the Trading Floor closing will be in effect 
beginning May 4, 2020. Specifically, the following fees and rebates 
will be assessed for Facilitation and Solicitation Transactions:

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                                                                   Agency Order                Facilitation Order or       Responses in the Solicitation
                                                         --------------------------------       Solicitation Order            or Facilitation Auction
                                                                                         --------------------------------           Mechanisms
                      Account type                          Penny Pilot      Non-Penny                                   -------------------------------
                                                              classes      Pilot classes    Penny Pilot      Non-Penny      Penny Pilot      Non-Penny
                                                                                              classes      Pilot classes      classes      Pilot classes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Public Customer.........................................           $0.00           $0.00           $0.00           $0.00           $0.25           $0.40
Professional Customer or Broker Dealer..................            0.00            0.00            0.15            0.15            0.25            0.40
Market Maker............................................            0.00            0.00            0.15            0.15            0.25            0.40
--------------------------------------------------------------------------------------------------------------------------------------------------------

    A $0.10 per contract rebate will be applied to Agency Orders 
executed through the Facilitation and Solicitation Auction Mechanisms 
where at least one party is a Non-Public Customer.
    In addition, the Liquidity Fees and Credits for Facilitation and 
Solicitation Transactions pursuant to Section III.B of the Fee Schedule 
will be as follows \6\:
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    \6\ The Exchange notes, liquidity fees and credits are applied 
in addition to any applicable Electronic Transaction fees as 
described in Section I of the Fee Schedule.

----------------------------------------------------------------------------------------------------------------
                                                                    Fee for  adding        Credit for  removing
                                                                liquidity  (all account  liquidity  (all account
                                                                         types)                   types)
----------------------------------------------------------------------------------------------------------------
Non-Penny Pilot Classes.......................................                    $0.75                  ($0.75)
Penny Pilot Classes...........................................                     0.25                   (0.25)
----------------------------------------------------------------------------------------------------------------

    The Exchange will continue to assess Trading Floor-only 
Participants the following Participant fees under Section IX. of the 
Fee Schedule:

 Initiation Fee--$2,500 (one-time fee)
 Participant Fee--$1,500 per month
 Trading Floor Booth Space Fee--$1,500 per month

    Lastly, the Exchange will continue to assess Trading Floor Permit 
Fees for all Participants, specifically:
 Floor Market Maker--$5,500 per month
 Floor Broker--$500 per month
 Badge Fee--$100 per month
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,\7\ 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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    \7\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange believes that the proposed changes to update the Fee 
Schedule to remove obsolete fees and references that were effective 
during the Trading Floor closure maintains clarity in the Fee Schedule 
and will alleviate potential confusion, thereby removing impediments to 
and perfecting the mechanism of a free and open market and a national 
market system and protecting investors and the public interest. As 
noted above, the proposed filing seeks to remove pricing changes that 
were in effect while the Trading Floor was inoperable. Because the BOX 
Trading Floor will reopen beginning on May 4, 2020, the Exchange 
believes the proposed changes are appropriate and will reduce investor 
confusion. Lastly, the Exchange believes that the proposed change is 
reasonable, equitable and not unfairly discriminatory because BOX will 
reassess the fees and rebates that were effective prior to the Trading 
Floor closure.

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 proposed changes do not 
address competitive issues, but rather, as

[[Page 31012]]

discussed above, are intended to amend the Fee Schedule to remove 
obsolete text and references that were effective during the Trading 
Floor closure due to the reopening of the BOX Trading Floor, which will 
alleviate potential confusion. Lastly, the Exchange notes that BOX will 
assess the fees and rebates that were effective prior to the Trading 
Floor closure. The Exchange does not believe that assessing these 
previously effective fees and rebates will impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Act.

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 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-2020-15 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-2020-15. 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-2020-15, and should be submitted on 
or before June 11, 2020.
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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\
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-10934 Filed 5-20-20; 8:45 am]
 BILLING CODE 8011-01-P