81 FR 25460 - 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

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 82 (April 28, 2016)

[Federal Register Volume 81, Number 82 (Thursday, April 28, 2016)]
[Notices]
[Pages 25460-25462]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-09901]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-77694; File No. SR-BOX-2016-17]


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

April 22, 2106.
    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 April 12, 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 BOX Volume Rebate (``BVR'') in Section I.B.2 of the 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 April 13, 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. 
Specifically, the Exchange proposes to amend the BOX Volume Rebate 
(``BVR'') in Section I.B.2 of the Fee Schedule.
    Under the current BVR, the Exchange offers a tiered per contract 
rebate for all

[[Page 25461]]

PIP Orders and COPIP Orders of 100 contracts and under. PIP and COPIP 
executions of 100 contracts and under are awarded a per contract rebate 
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     Per contract rebate  (all
                    of national customer          account types)
       Tier         volume in multiply-  -------------------------------
                       listed options
                     classes  (monthly)         PIP            COPIP
------------------------------------------------------------------------
1................  0.000% to 0.159%.....         ($0.00)         ($0.00)
2................  0.160% to 0.339%.....          (0.04)          (0.02)
3................  0.340% to 0.99%......          (0.11)          (0.04)
4................  1.00% and Above......          (0.14)          (0.06)
------------------------------------------------------------------------

    The Exchange proposes to amend the BVR to apply the rebate to only 
those PIP Orders and COPIP Orders of 100 and under contracts that do 
not trade solely with their contra order. The percentage thresholds 
will continue to be based on all 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 the proposed amendments to the BVR 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. 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. The Exchange believes providing a rebate to Participants 
that reach a certain volume threshold is equitable and non-
discriminatory as the rebate will apply to all Participants uniformly.
    The Exchange believes it is reasonable, equitable and non-
discriminatory to apply the BVR to PIP and COPIP Orders that do not 
trade solely with their contra order. The BVR is intended to 
incentivize Participants to direct Customer order flow to the Exchange, 
and the Exchange believes incentives are not necessary for internalized 
PIP and COPIP Orders that only trade against their contra order. 
Additionally, other Exchanges also make this distinction when providing 
rebates for transactions in their auction mechanisms.\6\
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    \6\ See the International Securities Exchange (``ISE'') Fee 
Schedule. Under the ISE Fee Schedule the initiator receives a 
``break-up'' rebate only for contracts that are submitted to their 
auction mechanism that do not trade with their contra order.
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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 believes the 
proposed fee changes are reasonably designed to enhance competition in 
BOX transactions, particularly auction transactions.
    The proposed rule change amends the BVR to only provide a rebate 
when the PIP or COPIP Order does not trade with its contra order. The 
Exchange does not believe that the proposed change burdens competition 
and will instead help promote competition by providing additional 
incentives for market participants to submit customer order flow to BOX 
and thus, create a greater opportunity for retail customers to receive 
additional price improvement.

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 [email protected]. Please include 
File Number SR-BOX-2016-17 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-2016-17. 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

[[Page 25462]]

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-2016-17, and should be 
submitted on or before May 19, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Brent J. Fields,
Secretary.
[FR Doc. 2016-09901 Filed 4-27-16; 8:45 am]
 BILLING CODE 8011-01-P