81 FR 89525 - 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 238 (December 12, 2016)

[Federal Register Volume 81, Number 238 (Monday, December 12, 2016)]
[Notices]
[Pages 89525-89527]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-29659]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-79486; File No. SR-BOX-2016-54]


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

December 6, 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 November 23, 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 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 December 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

[[Page 89526]]

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 amend Section IV. of the BOX Fee Schedule, Eligible Orders Routed to 
an Away Exchange.
    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 $0.60 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.\5\
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    \5\ See Securities Exchange Act Release No. 68149 (November 5, 
2012), 77 FR 67693 (November 13, 2012) (Notice of Filing and 
Immediate Effectiveness SR-BOX-2012-017).
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    The Exchange is now proposing to amend Section IV of the BOX Fee 
Schedule. Specifically, the Exchange proposes to delete the exception 
to Section IV which does not charge non-Professional, Public Customer 
Directed orders as discussed above.
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,\6\ 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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    \6\ 15 U.S.C. 78f(b)(4) and (5).
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    BOX believes that proposed changes to Section IV of the BOX Fee 
Schedule are reasonable, equitable and not unfairly discriminatory. 
Presently, the Exchange charges customer accounts $0.60 per contract 
executed on away exchanges and exempts non-Professional, Public 
Customer accounts from the routing fee for orders received by BOX via 
Directed Order when certain execution thresholds are met. The Exchange 
notes that it is not proposing to change the fee amount. The Exchange 
believes that the current fee amount is reasonable and appropriate as 
it is in line with what is currently charged by the industry.\7\ 
Additionally, the Exchange believes the proposed changes are equitable 
and not unfairly discriminatory, as the routing fee will now apply to 
all customer orders routed away from the Exchange. The Exchange notes 
that no other exchanges make this routing fee distinction based on 
execution thresholds as discussed above.\8\ Therefore, the Exchange 
believes that the proposed changes will simplify the Fee Schedule 
resulting in less investor confusion.
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    \7\ See International Securities Exchange (``ISE'') Fee Schedule 
Section IV (f). The Exchange notes that ISE charges the same fee for 
Market Makers, Non-ISE Market Makers, Broker Dealers/Firm 
Proprietaries, and Professional Customers. Priority Customers, 
however, are assessed a lower fee. BOX proposes to assess the same 
per contract fee for all account types. See also NYSE Arca 
(``Arca'') Fee Schedule.
    \8\ Id.
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    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. 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 routing 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.

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 \9\ and Rule 19b-4(f)(2) 
thereunder,\10\ because it establishes or changes a due, or fee.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 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-2016-54 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-2016-54. 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

[[Page 89527]]

submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-BOX-
2016-54, and should be submitted on or before January 3, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2016-29659 Filed 12-9-16; 8:45 am]
 BILLING CODE 8011-01-P