Document ID: SEC-2019-0184-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Exchange, LLC
Posted Date: 2019-02-21T05:00Z

[Federal Register Volume 84, Number 35 (Thursday, February 21, 2019)]
[Notices]
[Pages 5521-5523]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-02900]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85139; File No. SR-BOX-2019-02]

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 Modify 
Certain Agency Order Fees for Facilitation and Solicitation 
Transactions

February 14, 2019.
    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 February 1, 2019, 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

[[Page 5522]]

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 to 
amend the Fee Schedule [sic] on the BOX Options Market LLC (``BOX'') 
options 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
    The Exchange proposes to amend the Fee Schedule for trading on BOX 
to amend Section I.C (Facilitation and Solicitation Transactions).\5\ 
Specifically, the Exchange proposes to decrease the Agency Order \6\ 
fees for Professional Customers, Broker Dealers and Market Makers from 
$0.15 to $0.00 for Penny Pilot and Non-Penny Pilot Classes.
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    \5\ Transactions executed through the Solicitation Auction 
mechanism and Facilitation Auction mechanism.
    \6\ An Agency Order is a block-size order that an Order Flow 
Provider seeks to facilitate as agent through the Facilitation 
Auction or Solicitation Auction mechanism.
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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 are reasonable as 
the Exchange is eliminating the fees for Professional Customers, Broker 
Dealers and Market Makers for their Agency Orders in the Facilitation 
and Solicitation mechanism.\8\ The Exchange believes that eliminating 
these fees will attract order flow to these mechanisms which will 
result in greater liquidity and ultimately benefit all Participants 
trading on the Exchange. Further, the Exchange believes that the 
proposed change is equitable and not unfairly discriminatory, as the 
proposed change applies to all Professional Customers, Broker Dealers 
and Market Makers. The Exchange notes that there is no fee charged to 
Public Customers for their Agency Orders in the Facilitation and 
Solicitation mechanism.
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    \8\ The Exchange notes that it previously did not charge Broker 
Dealers, Professional Customers and Market Makers for Agency Orders 
in the Facilitation and Solicitation mechanism. See SR-BOX-2015-29.
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    Finally, the Exchange notes that it operates in a highly 
competitive market in which market participants can readily favor 
competing exchanges. In such an environment, the Exchange must 
continually review, and consider adjusting, its fees to remain 
competitive with other exchanges. For the reasons described above, the 
Exchange believes that the proposed rule change reflects this 
competitive environment.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act. The Exchange believes that the 
proposed changes to the Facilitation and Solicitation Transaction fees 
will not impose a burden on competition among various Exchange 
Participants. Rather, BOX believes that the changes will result in the 
Participants being charged appropriately for these transactions and are 
designed to enhance competition in the Facilitation and Solicitation 
mechanisms. Submitting an order is entirely voluntary and Participants 
can determine which order type they wish to submit, if any, to the 
Exchange. Further, the Exchange believes that this proposal will 
enhance competition between exchanges because it is designed to allow 
the Exchange to better compete with other exchanges for order flow. The 
Exchange does not believe that the proposed change will burden 
competition by creating a disparity between the fees an initiator pays 
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 the Facilitation and 
Solicitation mechanisms, and will help promote competition by providing 
incentives for market participants to submit Agency Orders, and thus 
benefit all Participants trading on the Exchange by attracting customer 
order flow.

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 \9\ and Rule 19b-4(f)(2) 
thereunder,\10\ because it establishes or changes a due, or fee.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 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-2019-02 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.

[[Page 5523]]

All submissions should refer to File Number SR-BOX-2019-02. 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-2019-02, and should be submitted on 
or before March 14, 2019.
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    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-02900 Filed 2-20-19; 8:45 am]
 BILLING CODE 8011-01-P