81 FR 50761 - 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 148 (August 2, 2016)

Page Range		50761-50763
FR Document		2016-18206
Federal Register, Volume 81 Issue 148 (Tuesday, August 2, 2016)
[Federal Register Volume 81, Number 148 (Tuesday, August 2, 2016)]
[Notices]
[Pages 50761-50763]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-18206]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-78428; File No. SR-BOX-2016-36]


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

July 27, 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 July 25, 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 
adjust the fee assessed in Section IV (Eligible Orders Routed to an 
Away Exchange) 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 August 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 50762]]

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 adjust the fee assessed in Section IV (Eligible Orders Routed to an 
Away Exchange) of the BOX Fee Schedule. Specifically, the Exchange 
proposes to increase the $0.50 per contract routing fee to $0.60.
    Currently, BOX uses third-party broker-dealers to route orders to 
other exchanges and incurs charges for each order routed to and 
executed at an away market, in addition to the transaction fees charged 
by other exchanges. To offset the fees charged to the Exchange for 
orders routed to other exchanges, the Exchange charges a $0.50 per 
contract fee for customer accounts. However, the Exchange charges no 
fee for non-Professional, Public Customer Directed Orders when: (i) 
Less than 45% of a Participants' monthly executions for such orders are 
routed to and executed at an Away Exchange; and (ii) 33% or more of a 
Participants' monthly executions for such orders occur through the PIP. 
In an effort to continue to offer routing services to its Participants 
at prices that approximate the cost to the Exchange, the Exchange is 
proposing to increase the routing fee to $0.60 per contract from $0.50 
per contract for customer accounts.
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. The Exchange notes that it operates in a highly competitive 
market in which market participants can readily direct order flow to 
competing venues or providers of routing services if they deem fee 
levels to be excessive.
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    \5\ 15 U.S.C. 78f(b)(4) and (5).
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    The Exchange generally attempts to approximate the cost of routing 
to other options exchanges, including other applicable costs to the 
Exchange for routing. The Exchange believes that the proposed fee 
change which is based on approximate Routing Costs is a reasonable, 
equitable and not unfairly discriminatory approach to pricing. 
Specifically, the Exchange believes that its proposal to moderately 
increase the routing fee is fair, equitable and reasonable because the 
fee is generally an approximation of the cost to the Exchange for 
routing orders to such exchanges. Further, the Exchange believes that 
the proposed fee is reasonable and appropriate as it is in line with 
what is currently charged by the industry.\6\ Accordingly, the Exchange 
believes that the proposed increases [sic] are reasonable, equitable 
and not unfairly discriminatory because they will help the Exchange to 
avoid subsidizing routing to away options exchanges and to continue 
providing quality routing services. The Exchange believes that its fee 
for orders routed to various venues is a reasonable approach to 
pricing, as it provides certainty with respect to execution fees at 
away options exchanges. As a general matter, the Exchange believes that 
the proposed fee will allow it to recoup and cover its costs of 
providing routing services to away exchanges. The Exchange notes that 
routing through the Exchange is voluntary. The Exchange also believes 
that the proposed fee for orders routed to and executed at away options 
exchanges is fair and equitable and not unreasonably discriminatory in 
that it applies equally to all Participants.
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    \6\ See Miami International Securities Exchange LLC (``MIAX'') 
Fee Schedule Section (1)(C) and NASDAQ Options Market (``NOM'') Fees 
and Rebates Section (2)3. On MIAX and NOM, the general range of fees 
for orders routed to away exchanges is between $0.10 and $0.99, with 
the $0.99 fee being assessed to Non-Customers.
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    The Exchange reiterates that it operates in a highly competitive 
market in which market participants can readily direct order flow to 
competing venues if they deem fee levels to be excessive or providers 
of routing services if they deem fee levels to be excessive. Finally, 
the Exchange notes that it constantly evaluates its routing fees, 
including profit and loss attributable to routing and would consider 
future adjustments to the proposed fee to the extent it was recouping a 
significant profit or loss from routing to away options exchanges.

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. As it relates to the proposes 
change to the routing fee, the proposes change will assist the Exchange 
in recouping costs for routing orders to other options exchanges on 
behalf of its Participants in a manner that is a better approximation 
of actual costs than is currently in place and that reflects pricing 
changes by various options exchanges as well as increases to other 
Routing Costs incurred by the Exchange. The Exchange also notes that 
Participants may choose to designate their orders as ineligible for 
routing to avoid incurring routing fees.\7\
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    \7\ See BOX Rule 15030 (describing the routing process, which 
requires orders to be designated as eligible for routing).
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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 \8\ and Rule 19b-4(f)(2) 
thereunder,\9\ because it establishes or changes a due, or fee.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 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-2016-36 on the subject line.

[[Page 50763]]

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-2016-36. 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-2016-36, and should be 
submitted on or before August 23, 2016.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-18206 Filed 8-1-16; 8:45 am]
 BILLING CODE 8011-01-P
50762 Federal Register / Vol. 81, No. 148 / Tuesday, August 2, 2016 / Notices

statements may be examined at the options exchanges, including other necessary or appropriate in furtherance
places specified in Item IV below. The applicable costs to the Exchange for of the purposes of the Act. As it relates
Exchange has prepared summaries, set routing. The Exchange believes that the to the proposes change to the routing
forth in Sections A, B, and C below, of proposed fee change which is based on fee, the proposes change will assist the
the most significant aspects of such approximate Routing Costs is a Exchange in recouping costs for routing
statements. reasonable, equitable and not unfairly orders to other options exchanges on
discriminatory approach to pricing. behalf of its Participants in a manner
A. Self-Regulatory Organization’s Specifically, the Exchange believes that that is a better approximation of actual
Statement of the Purpose of, and its proposal to moderately increase the costs than is currently in place and that
Statutory Basis for, the Proposed Rule routing fee is fair, equitable and reflects pricing changes by various
Change reasonable because the fee is generally options exchanges as well as increases
1. Purpose an approximation of the cost to the to other Routing Costs incurred by the
Exchange for routing orders to such Exchange. The Exchange also notes that
The Exchange proposes to amend the
exchanges. Further, the Exchange Participants may choose to designate
Fee Schedule for trading on BOX to
believes that the proposed fee is their orders as ineligible for routing to
adjust the fee assessed in Section IV reasonable and appropriate as it is in
(Eligible Orders Routed to an Away avoid incurring routing fees.7
line with what is currently charged by
Exchange) of the BOX Fee Schedule. the industry.6 Accordingly, the C. Self-Regulatory Organization’s
Specifically, the Exchange proposes to Exchange believes that the proposed Statement on Comments on the
increase the $0.50 per contract routing increases [sic] are reasonable, equitable Proposed Rule Change Received From
fee to $0.60. and not unfairly discriminatory because Members, Participants, or Others
Currently, BOX uses third-party they will help the Exchange to avoid
broker-dealers to route orders to other No written comments were either
subsidizing routing to away options solicited or received.
exchanges and incurs charges for each exchanges and to continue providing
order routed to and executed at an away quality routing services. The Exchange III. Date of Effectiveness of the
market, in addition to the transaction believes that its fee for orders routed to Proposed Rule Change and Timing for
fees charged by other exchanges. To various venues is a reasonable approach Commission Action
offset the fees charged to the Exchange to pricing, as it provides certainty with
for orders routed to other exchanges, the The foregoing rule change has become
respect to execution fees at away
Exchange charges a $0.50 per contract effective pursuant to Section
options exchanges. As a general matter,
fee for customer accounts. However, the 19(b)(3)(A)(ii) of the Exchange Act 8 and
the Exchange believes that the proposed
Exchange charges no fee for non- Rule 19b–4(f)(2) thereunder,9 because it
fee will allow it to recoup and cover its
Professional, Public Customer Directed establishes or changes a due, or fee.
costs of providing routing services to
Orders when: (i) Less than 45% of a away exchanges. The Exchange notes At any time within 60 days of the
Participants’ monthly executions for that routing through the Exchange is filing of the proposed rule change, the
such orders are routed to and executed voluntary. The Exchange also believes Commission summarily may
at an Away Exchange; and (ii) 33% or that the proposed fee for orders routed temporarily suspend the rule change if
more of a Participants’ monthly to and executed at away options it appears to the Commission that the
executions for such orders occur exchanges is fair and equitable and not action is necessary or appropriate in the
through the PIP. In an effort to continue unreasonably discriminatory in that it public interest, for the protection of
to offer routing services to its applies equally to all Participants. investors, or would otherwise further
Participants at prices that approximate The Exchange reiterates that it the purposes of the Act. If the
the cost to the Exchange, the Exchange operates in a highly competitive market Commission takes such action, the
is proposing to increase the routing fee in which market participants can Commission shall institute proceedings
to $0.60 per contract from $0.50 per readily direct order flow to competing to determine whether the proposed rule
contract for customer accounts. venues if they deem fee levels to be should be approved or disapproved.
2. Statutory Basis excessive or providers of routing IV. Solicitation of Comments
services if they deem fee levels to be
The Exchange believes that the excessive. Finally, the Exchange notes Interested persons are invited to
proposal is consistent with the that it constantly evaluates its routing submit written data, views, and
requirements of Section 6(b) of the Act, fees, including profit and loss arguments concerning the foregoing,
in general, and Section 6(b)(4) and attributable to routing and would including whether the proposed rule
6(b)(5)of the Act,5 in particular, in that consider future adjustments to the change is consistent with the Act.
it provides for the equitable allocation proposed fee to the extent it was Comments may be submitted by any of
of reasonable dues, fees, and other recouping a significant profit or loss the following methods:
charges among BOX Participants and from routing to away options exchanges.
other persons using its facilities and Electronic Comments
does not unfairly discriminate between B. Self-Regulatory Organization’s • Use the Commission’s Internet
customers, issuers, brokers or dealers. Statement on Burden on Competition comment form (http://www.sec.gov/
The Exchange notes that it operates in The Exchange does not believe that rules/sro.shtml); or
a highly competitive market in which the proposed rule change will impose • Send an email to rule-comments@
mstockstill on DSK3G9T082PROD with NOTICES

market participants can readily direct any burden on competition not sec.gov. Please include File Number SR–
order flow to competing venues or BOX–2016–36 on the subject line.
providers of routing services if they 6 See Miami International Securities Exchange

deem fee levels to be excessive. LLC (‘‘MIAX’’) Fee Schedule Section (1)(C) and
7 See BOX Rule 15030 (describing the routing
The Exchange generally attempts to NASDAQ Options Market (‘‘NOM’’) Fees and
Rebates Section (2)3. On MIAX and NOM, the process, which requires orders to be designated as
approximate the cost of routing to other general range of fees for orders routed to away eligible for routing).
8 15 U.S.C. 78s(b)(3)(A)(ii).
exchanges is between $0.10 and $0.99, with the
5 15 U.S.C. 78f(b)(4) and (5). $0.99 fee being assessed to Non-Customers. 9 17 CFR 240.19b–4(f)(2).

VerDate Sep<11>2014 18:35 Aug 01, 2016 Jkt 238001 PO 00000 Frm 00081 Fmt 4703 Sfmt 4703 E:\FR\FM\02AUN1.SGM 02AUN1
Document Created: 2016-08-02 01:47:45
Document Modified: 2016-08-02 01:47:45
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
FR Citation		81 FR 50761