Document ID: SEC-2019-0737-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Exchange LLC
Posted Date: 2019-05-30T04:00Z

[Federal Register Volume 84, Number 104 (Thursday, May 30, 2019)]
[Notices]
[Pages 25092-25093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-11230]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-85927; File Nos. SR-BOX-2018-24, SR-BOX-2018-37, and 
SR-BOX-2019-04]

In the Matter of the BOX Exchange LLC Regarding an Order 
Disapproving Proposed Rule Changes To Amend the Fee Schedule on the BOX 
Market LLC Options Facility To Establish BOX Connectivity Fees for 
Participants and Non-Participants Who Connect to the BOX Network; Order 
Granting Petition for Review and Scheduling Filing of Statements

May 23, 2019.
    This matter comes before the Securities and Exchange Commission 
(``Commission'') on petition to review the disapproval, through 
delegated authority, of the BOX Exchange LLC (f/k/a BOX Options 
Exchange LLC) (``BOX'' or ``Exchange'') proposed rule changes (File 
Nos. SR-BOX-2018-24, SR-BOX-2018-37, and SR-BOX-2019-04) to amend the 
fee schedule on the BOX Market LLC (``BOX'') options facility to 
establish certain connectivity fees and reclassify its high speed 
vendor feed connection as a port fee.
    On July 19, 2018, the Exchange filed with the Commission, pursuant 
to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ a proposed rule change (SR-
BOX-2018-24) (``BOX 1'') to amend the BOX fee schedule to establish 
certain connectivity fees and reclassify its high speed vendor feed 
connection as a port fee. BOX 1 was immediately effective upon filing 
with the Commission pursuant to Section 19(b)(3)(A) of the Act.\3\ BOX 
1 was published for comment in the Federal Register on August 2, 
2018.\4\ On September 17, 2018, the Division of Trading and Markets 
(``Division''), acting on behalf of the Commission by delegated 
authority, issued an order temporarily suspending BOX 1 pursuant to 
Section 19(b)(3)(C) of the Act \5\ and simultaneously instituting 
proceedings under Section 19(b)(2)(B) of the Act \6\ to determine 
whether to approve or disapprove BOX 1 (``Order Instituting Proceedings 
I'').\7\
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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).
    \4\ See Securities Exchange Act Release No. 83728 (July 27, 
2018), 83 FR 37853.
    \5\ 15 U.S.C. 78s(b)(3)(C).
    \6\ 15 U.S.C. 78s(b)(2)(B).
    \7\ See Securities Exchange Act Release No. 84168 (September 17, 
2018), 83 FR 47947 (September 21, 2018).

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[[Page 25093]]

    On September 26, 2018, the Exchange filed a petition for review of 
Order Instituting Proceedings I (``BOX 1 Petition'').\8\ On November 
16, 2018, the Commission granted the BOX 1 Petition.\9\ On January 25, 
2019, pursuant to Section 19(b)(2) of the Act,\10\ the Commission 
designated a longer period within which to approve or disapprove BOX 
1.\11\ On February 25, 2019, the Commission issued an order affirming 
the staff's action by delegated authority temporarily suspending the 
rule filing and instituting proceedings.\12\
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    \8\ See Petition for Review of Order Temporarily Suspending BOX 
Exchange LLC's Proposal to Amend the Fee Schedule on BOX Market LLC, 
dated September 26, 2018.
    \9\ See Securities Exchange Act Release No. 84614 (November 16, 
2018), 83 FR 59432 (November 23, 2018).
    \10\ 15 U.S.C. 78s(b)(2).
    \11\ See Securities Exchange Act Release No. 84989, 84 FR 858 
(January 31, 2019). The Commission designated March 29, 2019, as the 
date by which the Commission would approve or disapprove BOX 1.
    \12\ See Securities Exchange Act Release No. 85184, 84 FR 6842 
(February 28, 2019).
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    On November 30, 2018, the Exchange filed with the Commission a 
second proposed rule change (SR-BOX-2018-37) (``BOX 2'') to amend the 
BOX fee schedule to establish the same fees established by BOX 1.\13\ 
BOX 2 was immediately effective upon filing with the Commission 
pursuant to Section 19(b)(3)(A) of the Act.\14\ On December 14, 2018, 
the Division, acting on behalf of the Commission by delegated 
authority, issued a notice of BOX 2 and order temporarily suspending 
BOX 2 pursuant to Section 19(b)(3)(C) of the Act \15\ and 
simultaneously instituting proceedings under Section 19(b)(2)(B) of the 
Act \16\ to determine whether to approve or disapprove BOX 2.\17\
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    \13\ The proposed fees in BOX 2 were identical to those proposed 
in BOX 1 and the Form 19b-4 for the two filings were substantively 
identical, except BOX 2 also identified the categories of the 
Exchange's costs to offer connectivity services and stated that the 
proposed fees would ``offset'' the Exchange's costs. See Securities 
Exchange Act Release No. 85459 (March 29, 2019), 84 FR 13363, 13364, 
n.22 (April 4, 2019) (``Disapproval Order'').
    \14\ 15 U.S.C. 78s(b)(3)(A).
    \15\ 15 U.S.C. 78s(b)(3)(C).
    \16\ 15 U.S.C. 78s(b)(2)(B).
    \17\ See Securities Exchange Act Release No. 84823 (December 14, 
2018), 83 FR 65381 (December 20, 2018).
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    On February 13, 2019, the Exchange filed with the Commission a 
third proposed rule change (SR-BOX-2019-04) (``BOX 3'' and, together 
with BOX 1 and BOX 2, ``proposed rule changes'') to amend the BOX fee 
schedule to establish the same fees proposed by BOX 1 and BOX 2.\18\ 
BOX 3 was immediately effective upon filing with the Commission 
pursuant to Section 19(b)(3)(A) of the Act.\19\ On February 26, 2019, 
the Division, acting on behalf of the Commission by delegated 
authority, issued a notice of BOX 3 and order temporarily suspending 
BOX 3 pursuant to Section 19(b)(3)(C) of the Act \20\ and 
simultaneously instituting proceedings under Section 19(b)(2)(B) of the 
Act \21\ to determine whether to approve or disapprove BOX 3 (``Order 
Instituting Proceedings III'').\22\ On March 5, 2019, the Exchange 
filed a petition for review of Order Instituting Proceedings III (``BOX 
3 Petition'').\23\ On March 22, 2019, the Commission granted the BOX 3 
Petition and issued an order affirming the action by delegated 
authority.\24\
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    \18\ The proposed fees in BOX 3 were identical to those proposed 
in BOX 2 and the Form 19b-4 for the two filings were substantively 
identical. See Disapproval Order, supra note 13, at 13364, n.28.
    \19\ 15 U.S.C. 78s(b)(3)(A).
    \20\ 15 U.S.C. 78s(b)(3)(C).
    \21\ 15 U.S.C. 78s(b)(2)(B).
    \22\ See Securities Exchange Act Release No. 85201, 84 FR 7146 
(March 1, 2019).
    \23\ See Petition for Review of Order Temporarily Suspending BOX 
Exchange LLC's Proposal to Amend the Fee Schedule on BOX Market LLC, 
dated March 5, 2019.
    \24\ See Securities Exchange Act Release No. 85399, 84 FR 11850 
(March 28, 2019).
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    After consideration of the record in the proposed rule changes, the 
Division, pursuant to delegated authority,\25\ issued an order 
disapproving the proposed rule changes on March 29, 2019.\26\ On April 
8, 2019, pursuant to Rule 430 of the Commission's Rules of 
Practice,\27\ the Exchange filed a petition for review of the 
Disapproval Order.
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    \25\ 17 CFR 200.300-3(a)(12).
    \26\ See Disapproval Order, supra note 13.
    \27\ 17 CFR 201.430.
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    Pursuant to Rule 431 of the Commission's Rules of Practice,\28\ the 
Exchange's petition for review of the Disapproval Order is granted. 
Further, the Commission hereby establishes that any party to the action 
or other person may file a written statement in support of or in 
opposition to the Disapproval Order on or before June 20, 2019.
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    \28\ 17 CFR 201.431.
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    For the reasons stated above, it is hereby:
    Ordered that the Exchange's petition for review of the Division's 
action to disapprove the proposed rule changes by delegated authority 
is granted; and
    It is further ordered that any party or other person may file a 
statement in support of or in opposition to the action made pursuant to 
delegated authority on or before June 20, 2019.
    The order disapproving the proposed rule changes shall remain in 
effect.

    By the Commission.
Eduardo A. Aleman,
Deputy Secretary.
[FR Doc. 2019-11230 Filed 5-29-19; 8:45 am]
 BILLING CODE 8011-01-P