Document ID: SEC-2016-1812-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange LLC
Posted Date: 2016-10-11T04:00Z

[Federal Register Volume 81, Number 196 (Tuesday, October 11, 2016)]
[Notices]
[Pages 70222-70224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-24425]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79040; File No. SR-BOX-2016-49]

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

October 4, 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 September 30, 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 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 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 
October 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

[[Page 70223]]

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. 
Specifically, the Exchange proposes to revise certain qualification 
thresholds and fees in Section I.B.2 of the BOX Fee Schedule, the BOX 
Volume Rebate (``BVR'').
    Under the current BVR, the Exchange offers a tiered per contract 
rebate for all Public Customer PIP Orders and COPIP orders of 100 
contracts and under that do not trade solely with their contra order. 
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 current per contract rebate for Participants in PIP and COPIP 
Transactions under the BVR is:

----------------------------------------------------------------------------------------------------------------
                                                    Percentage thresholds of         Per contract rebate (all
                                                   national customer volume in            account types)
                     Tier                        multiply-listed options classes -------------------------------
                                                            (monthly)                   PIP            COPIP
----------------------------------------------------------------------------------------------------------------
1.............................................  0.000% to 0.159%................         ($0.00)         ($0.00)
2.............................................  0.160% to 0.339%................          (0.02)          (0.02)
3.............................................  0.340% to 0.999%................          (0.04)          (0.04)
4.............................................  1.000% to 1.249%................          (0.07)          (0.06)
5.............................................  1.250% and Above................          (0.12)          (0.06)
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    The Exchange proposes to adjust certain BVR percentage thresholds 
and fees within the BVR. Specifically, the Exchange proposes to 
eliminate Tier 4 and adjust the percentage thresholds in Tier 5 to 
``1.000% and Above.'' The Exchange then proposes to renumber Tier 5 to 
Tier 4. 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. Additionally, the Exchange proposes to 
decrease the fee [sic] in the revised Tier 4 for PIP transactions to 
$0.11 from $0.12.
    The new BVR set forth in Section I.B.2 of the BOX Fee Schedule will 
be as follows:

----------------------------------------------------------------------------------------------------------------
                                                    Percentage thresholds of         Per contract rebate (all
                                                   national customer volume in            account types)
                     Tier                        multiply-listed options classes -------------------------------
                                                            (monthly)                   PIP            COPIP
----------------------------------------------------------------------------------------------------------------
1.............................................  0.000% to 0.159%................         ($0.00)         ($0.00)
2.............................................  0.160% to 0.339%................          (0.02)          (0.02)
3.............................................  0.340% to 0.999%................          (0.04)          (0.04)
4.............................................  1.000% and Above................          (0.11)          (0.06)
----------------------------------------------------------------------------------------------------------------

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 the proposed amendments to the BVR in Section 
I.B.2 of the BOX Fee Schedule are reasonable, equitable and non-
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 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. 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.
    BOX believes it is reasonable, equitable and not unfairly 
discriminatory to adjust the monthly Percentage Thresholds of National 
Customer Volume in Multiply-Listed Options Classes and their applicable 
rebates. The volume thresholds and rebates are meant to incentivize 
Participants to direct order flow to the Exchange to obtain the benefit 
of the rebate, which will in turn benefit all market participants by 
increasing liquidity on the Exchange. Other exchanges employ similar 
incentive programs; \6\ and the Exchange believes that the proposed 
changes to the volume thresholds and rebates are reasonable and 
competitive when compared to incentive structures at other exchanges.
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    \6\ 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 revise certain qualification thresholds and fees in 
Section I.B. of the BOX Fee Schedule. The Exchange believes that the 
volume

[[Page 70224]]

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 \7\ and Rule 19b-4(f)(2) 
thereunder,\8\ because it establishes or changes a due, or fee.
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 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-2016-49 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-2016-49. 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-2016-49, and should be 
submitted on or before November 1, 2016.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-24425 Filed 10-7-16; 8:45 am]
 BILLING CODE 8011-01-P