81 FR 39092 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule To Make Non-Substantive Clerical Amendments

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 81, Issue 115 (June 15, 2016)

[Federal Register Volume 81, Number 115 (Wednesday, June 15, 2016)]
[Notices]
[Pages 39092-39094]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-14083]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78024; File No. SR-BOX-2016-23]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend the Fee Schedule To Make Non-Substantive Clerical Amendments

June 9, 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 May 31, 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 
make non-substantive clerical amendments. While changes to the fee 
schedule pursuant to this proposal will be effective upon filing, the 
changes will become operative on June 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 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
Non-Auction Transactions
    The Exchange proposes to amend Section I (Non-Auction Transactions) 
of the BOX Fee Schedule to clarify what volume on BOX will count 
towards the monthly volume tier in Section I.A.1 of the Box Fee 
Schedule. The Exchange proposes to add language to the first paragraph 
of Section I.A.1 to clarify that percentage thresholds will be 
calculated on a monthly basis by totaling the Market Maker or Public 
Customer's executed Auction and Non-Auction

[[Page 39093]]

transaction volume on BOX, relative to the total national Market Maker 
or Customer volume in multiply-listed options classes.
    The Tiered Volume Rebate for Non-Auction Transactions has been in 
place since November 2014 \5\ and was amended in November 2015 \6\ to 
calculate percentage thresholds on a monthly basis by totaling the 
Market Maker or Public Customer's executed volume on BOX, relative to 
the total national Market Maker or Customer volume in multiply-listed 
options classes. The Exchange believes this additional language will 
reduce investor confusion about how the percentage thresholds are 
calculated with respect to non-auction transactions.
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    \5\ See Securities Exchange Act Release No. 73547 (November 6, 
2014), 79 FR 67520 (November 13, 2014) (Notice of Filing and 
Immediate Effectiveness SR-BOX-2014-25).
    \6\ See Securities Exchange Act Release No. 76447 (November 16, 
2015), 80 FR 72758 (November 20, 2015) (Notice of Filing and 
Immediate Effectiveness SR-BOX-2015-36).
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Liquidity Fees and Credits
    The Exchange also proposes to amend Section II (Liquidity Fees and 
Credits) of the BOX Fee Schedule to make non-substantive clerical 
changes. Specifically, in Section II of the Fee Schedule, the Exchange 
proposes to delete the second and third paragraphs that detail which 
non-auction orders will be considered to add or remove liquidity with 
regard to fees and credits. The Exchange believes this text is now 
obsolete, as non-auction transactions are no longer subject to 
Liquidity Fees and Credits and removing the language will reduce 
investor confusion about the applicable fees for non-auction 
transactions.\7\
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    \7\ See supra note 1 [sic].
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    Liquidity Fees and Credits have been in place on BOX since its 
inception in 2012. For non-auction transactions, these fees and credits 
were applied to any order, including an order with a Fill and Kill 
designation and were in addition to the Exchange fees in Section I of 
the BOX Fee Schedule. Orders which executed against an order that was 
being exposed before being placed on the BOX Book were considered to 
add liquidity. On the contrary, any order, including an order with a 
Fill and Kill designation, that removed liquidity by trading 
immediately upon entry to the BOX Book or following its exposure as 
part of NBBO filtering, received a credit.\8\ However, with the 
adoption of the new exchange fee pricing structure for non-auction 
transactions in 2014,\9\ the Exchange removed all liquidity fees and 
credits for non-auction transactions. The Exchange believes that 
deleting these paragraphs will provide clarity and will also eliminate 
confusion among market participants, which is in the interest of all 
investors and the general public.
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    \8\ See Securities Exchange Act Release No. 66979 (May 14, 
2012), 77 FR 29740 (May 18, 2012) (Notice of Filing and Immediate 
Effectiveness SR-BOX-2012-002).
    \9\ See supra note 1 [sic].
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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,\10\ 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. In particular, the Exchange believes it is reasonable and 
appropriate to add language to Section I.A.1 and remove language from 
Section II because doing so will eliminate any potential for investor 
confusion. The Exchange believes that the proposed changes are 
reasonable, equitable and not unfairly discriminatory because it treats 
all market participants equally and will not have an adverse impact on 
any particular market participant.
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    \10\ 15 U.S.C. 78f(b)(4) and (5).
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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 proposed change is not 
designed to address any competitive issue but rather to make non-
substantive changes to the BOX Fee Schedule, thereby reducing confusion 
and making the Exchange's Fee Schedule easier to understand. The 
Exchange believes that the proposed rule change will serve to promote 
regulatory clarity and consistency, thereby reducing burdens on the 
marketplace and facilitating investor protection.

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 \11\ and Rule 19b-4(f)(2) 
thereunder,\12\ because it establishes or changes a due, or fee.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 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-2016-23 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-2016-23. 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

[[Page 39094]]

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-2016-23, and should be submitted on or before July 
6, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-14083 Filed 6-14-16; 8:45 am]
BILLING CODE 8011-01-P