82 FR 26175 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 7260 by Extending the Penny Pilot Program Through December 31, 2017

SECURITIES AND EXCHANGE COMMISSION

Federal Register Volume 82, Issue 107 (June 6, 2017)

Page Range		26175-26176
FR Document		2017-11612
Federal Register, Volume 82 Issue 107 (Tuesday, June 6, 2017)
[Federal Register Volume 82, Number 107 (Tuesday, June 6, 2017)]
[Notices]
[Pages 26175-26176]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-11612]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-80828; File No. SR-BOX-2017-18]


Self-Regulatory Organizations; BOX Options Exchange LLC; Notice 
of Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend Rule 7260 by Extending the Penny Pilot Program Through December 
31, 2017

May 31, 2017.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on May 23, 2017, 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 self-regulatory organization. The Commission 
is publishing this notice to solicit comments on the proposed rule from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rule 7260 by extending the Penny 
Pilot Program through December 31, 2017. 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 self-regulatory organization 
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 self-regulatory organization 
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 extend the effective time period of the 
Penny Pilot Program that is currently scheduled to expire on June 30, 
2017, until December 31, 2017.\3\ The Penny Pilot Program permits 
certain classes to be quoted in penny increments. The minimum price 
variation for all classes included in the Penny Pilot Program, except 
for PowerShares QQQ Trust (``QQQQ'')[supreg], SPDR S&P 500 Exchange 
Traded Funds (``SPY''), and iShares Russell 2000 Index Funds (``IWM''), 
will continue to be $0.01 for all quotations in options series that are 
quoted at less than $3 per contract and $0.05 for all quotations in 
options series that are quoted at $3 per contract or greater. QQQQ, 
SPY, and IWM will continue to be quoted in $0.01 increments for all 
options series.
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    \3\ The Penny Pilot Program has been in effect on the Exchange 
since its inception in May 2012. See Securities Exchange Act Release 
Nos. 66871 (April 27, 2012), 77 FR 26323 (May 3, 2012) (File No.10-
206, In the Matter of the Application of BOX Options Exchange LLC 
for Registration as a National Securities Exchange Findings, 
Opinion, and Order of the Commission), 67328 (June 29, 2012), 77 FR 
40123 (July 6, 2012) (SR-BOX-2012-007), 68425 (December 13, 2012), 
77 FR 75234 (December 19, 2013) (SR-BOX-2012-021), 69789 (June 18, 
2013), 78 FR 37854 (June 24, 2013) (SR-BOX-2013-31), 71056 (December 
12, 2013), 78 FR 76691 (December 18, 2013) (SR-BOX-2013-56), 72348 
(June 9, 2014), 79 FR 33976 (June 13, 2014) (SR-BOX-2014-17), 73822 
(December 11, 2014), 79 FR 75606 (December 18, 2014) (SR-BOX-2014-
29), 75295 (June 25, 2015), 80 FR 37690 (July 1, 2015)(SR-BOX-2015-
23), 78172 (June 28, 2016), 81 FR 43325 (July 1, 2016)(SR-BOX-2016-
24) and 79429 (November 30, 2016), 81 FR 87991 (December 6, 
2016)(SR-BOX-2016-55). The extension of the effective date and the 
revision of the date to replace issues that have been delisted are 
the only changes to the Penny Pilot Program being proposed at this 
time.
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    The Exchange may replace, on a semi-annual basis, any Pilot Program 
classes

[[Page 26176]]

that have been delisted on the second trading day following July 1, 
2017. The Exchange notes that the replacement classes will be selected 
based on trading activity for the six month period beginning December 
1, 2016 and ending May 31, 2017 for the July 2017 replacements. The 
Exchange will employ the same parameters to prospective replacement 
classes as approved and applicable under the Pilot Program, including 
excluding high-priced underlying securities. The Exchange will 
distribute a Regulatory Circular notifying Participants which 
replacement classes shall be included in the Penny Pilot Program.
    BOX is specifically authorized to act jointly with the other 
options exchanges participating in the Pilot Program in identifying any 
replacement class.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\4\ in general, and Section 
6(b)(5) of the Act,\5\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in facilitating transactions in securities, and to 
remove impediments to and perfect the mechanism of a free and open 
market and a national market system, and, in general protect investors 
and the public interest.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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    In particular, the proposed rule change, which extends the Penny 
Pilot until December 31, 2017 and changes the dates for replacing Penny 
Pilot issues that were delisted to the second trading day following 
July 1, 2017, will enable public customers and other market 
participants to express their true prices to buy and sell options for 
the benefit of all market participants. This is consistent with the 
Act.

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. To the contrary, this proposal 
is pro-competitive because it allows Penny Pilot issues to continue 
trading on the Exchange. Moreover, the Exchange believes that the 
proposed rule change will allow for further analysis of the Pilot and a 
determination of how the Pilot should be structured in the future; and 
will serve to promote regulatory clarity and consistency, thereby 
reducing burdens on the marketplace and facilitating investor 
protection. The Pilot is an industry wide initiative supported by all 
other option exchanges. The Exchange believes that extending the Pilot 
will allow for continued competition between market participants on the 
Exchange trading similar products as their counterparts on other 
exchanges, while at the same time allowing the Exchange to continue to 
compete for order flow with other exchanges in option issues trading as 
part of the Pilot.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    (a) This proposed rule change is filed pursuant to paragraph (A) of 
section 19(b)(3) of the Exchange Act \6\ and Rule 19b-4(f)(6) 
thereunder.\7\
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6).
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    (b) This proposed rule change does not significantly affect the 
protection of investors or the public interest, does not impose any 
significant burden on competition, and, by its terms, does not become 
operative for 30 days after the date of the filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest.
    At any time within 60 days of the filing of the proposed rule 
change, the Commission summarily may temporarily suspend such rule 
change if it appears to the Commission that such action is necessary or 
appropriate in the public interest, for the protection of investors, or 
otherwise in furtherance of 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-2017-18 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-2017-18. 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, on official 
business days between the hours of 10:00 a.m. and 3:00 p.m., located at 
100 F Street NE., Washington, DC 20549. 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-
2017-18 and should be submitted on or before June 27, 2017.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-11612 Filed 6-5-17; 8:45 am]
 BILLING CODE 8011-01-P
Federal Register / Vol. 82, No. 107 / Tuesday, June 6, 2017 / Notices 26175

subparagraph (f)(6) of Rule 19b–4 Reference Room, 100 F Street NE., Exchange’s Internet Web site at http://
thereunder.9 Washington, DC 20549, on official boxexchange.com.
At any time within 60 days of the business days between the hours of
II. Self-Regulatory Organization’s
filing of the proposed rule change, the 10:00 a.m. and 3:00 p.m. Copies of the
Statement of the Purpose of, and
Commission summarily may filing also will be available for
Statutory Basis for, the Proposed Rule
temporarily suspend such rule change if inspection and copying at the principal
Change
it appears to the Commission that such office of the Exchange. All comments
action is: (i) Necessary or appropriate in received will be posted without change; In its filing with the Commission, the
the public interest; (ii) for the protection the Commission does not edit personal self-regulatory organization included
of investors; or (iii) otherwise in identifying information from statements concerning the purpose of,
furtherance of the purposes of the Act. submissions. You should submit only and basis for, the proposed rule change
If the Commission takes such action, the information that you wish to make and discussed any comments it received
Commission shall institute proceedings available publicly. All submissions on the proposed rule change. The text
to determine whether the proposed rule should refer to File Number SR–Phlx– of these statements may be examined at
should be approved or disapproved. 2017–40 and should be submitted on or the places specified in Item IV below.
before June 27, 2017. The self-regulatory organization has
IV. Solicitation of Comments prepared summaries, set forth in
For the Commission, by the Division of
Interested persons are invited to Trading and Markets, pursuant to delegated Sections A, B, and C below, of the most
submit written data, views, and authority.10 significant aspects of such statements.
arguments concerning the foregoing, Eduardo A. Aleman, A. Self-Regulatory Organization’s
including whether the proposed rule Assistant Secretary. Statement of the Purpose of, and
change is consistent with the Act. [FR Doc. 2017–11604 Filed 6–5–17; 8:45 am] Statutory Basis for, the Proposed Rule
Comments may be submitted by any of BILLING CODE 8011–01–P Change
the following methods:
1. Purpose
Electronic Comments
SECURITIES AND EXCHANGE The Exchange proposes to extend the
• Use the Commission’s Internet COMMISSION effective time period of the Penny Pilot
comment form (http://www.sec.gov/ Program that is currently scheduled to
rules/sro.shtml); or [Release No. 34–80828; File No. SR–BOX– expire on June 30, 2017, until December
• Send an email to rule-comments@ 2017–18]
31, 2017.3 The Penny Pilot Program
sec.gov. Please include File Number SR– permits certain classes to be quoted in
Self-Regulatory Organizations; BOX
Phlx–2017–40 on the subject line. penny increments. The minimum price
Options Exchange LLC; Notice of
Paper Comments Filing and Immediate Effectiveness of variation for all classes included in the
a Proposed Rule Change To Amend Penny Pilot Program, except for
• Send paper comments in triplicate PowerShares QQQ Trust (‘‘QQQQ’’)®,
to Secretary, Securities and Exchange Rule 7260 by Extending the Penny
Pilot Program Through December 31, SPDR S&P 500 Exchange Traded Funds
Commission, 100 F Street NE., (‘‘SPY’’), and iShares Russell 2000 Index
Washington, DC 20549–1090. 2017
Funds (‘‘IWM’’), will continue to be
All submissions should refer to File May 31, 2017. $0.01 for all quotations in options series
Number SR–Phlx–2017–40. This file Pursuant to Section 19(b)(1) of the that are quoted at less than $3 per
number should be included on the Securities Exchange Act of 1934 contract and $0.05 for all quotations in
subject line if email is used. To help the (‘‘Act’’),1 and Rule 19b–4 thereunder,2 options series that are quoted at $3 per
Commission process and review your notice is hereby given that on May 23, contract or greater. QQQQ, SPY, and
comments more efficiently, please use 2017, BOX Options Exchange LLC (the IWM will continue to be quoted in $0.01
only one method. The Commission will ‘‘Exchange’’) filed with the Securities increments for all options series.
post all comments on the Commission’s and Exchange Commission The Exchange may replace, on a semi-
Internet Web site (http://www.sec.gov/ (‘‘Commission’’) the proposed rule annual basis, any Pilot Program classes
rules/sro.shtml). Copies of the change as described in Items I, II, and
submission, all subsequent III below, which Items have been 3 The Penny Pilot Program has been in effect on

amendments, all written statements prepared by the self-regulatory the Exchange since its inception in May 2012. See
Securities Exchange Act Release Nos. 66871 (April
with respect to the proposed rule organization. The Commission is 27, 2012), 77 FR 26323 (May 3, 2012) (File No.10–
change that are filed with the publishing this notice to solicit 206, In the Matter of the Application of BOX
Commission, and all written comments on the proposed rule from Options Exchange LLC for Registration as a
National Securities Exchange Findings, Opinion,
communications relating to the interested persons. and Order of the Commission), 67328 (June 29,
proposed rule change between the 2012), 77 FR 40123 (July 6, 2012) (SR–BOX–2012–
I. Self-Regulatory Organization’s
Commission and any person, other than 007), 68425 (December 13, 2012), 77 FR 75234
Statement of the Terms of Substance of (December 19, 2013) (SR–BOX–2012–021), 69789
those that may be withheld from the
the Proposed Rule Change (June 18, 2013), 78 FR 37854 (June 24, 2013) (SR–
public in accordance with the BOX–2013–31), 71056 (December 12, 2013), 78 FR
provisions of 5 U.S.C. 552, will be The Exchange proposes to amend 76691 (December 18, 2013) (SR–BOX–2013–56),
available for Web site viewing and Rule 7260 by extending the Penny Pilot 72348 (June 9, 2014), 79 FR 33976 (June 13, 2014)
Program through December 31, 2017. (SR–BOX–2014–17), 73822 (December 11, 2014), 79
printing in the Commission’s Public FR 75606 (December 18, 2014) (SR–BOX–2014–29),
mstockstill on DSK30JT082PROD with NOTICES

The text of the proposed rule change is 75295 (June 25, 2015), 80 FR 37690 (July 1,
9 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– available from the principal office of the 2015)(SR–BOX–2015–23), 78172 (June 28, 2016), 81
4(f)(6) requires a self-regulatory organization to give Exchange, at the Commission’s Public FR 43325 (July 1, 2016)(SR–BOX–2016–24) and
the Commission written notice of its intent to file Reference Room and also on the 79429 (November 30, 2016), 81 FR 87991
the proposed rule change at least five business days (December 6, 2016)(SR–BOX–2016–55). The
prior to the date of filing of the proposed rule extension of the effective date and the revision of
10 17 CFR 200.30–3(a)(12).
change, or such shorter time as designated by the the date to replace issues that have been delisted
1 15 U.S.C. 78s(b)(1).
Commission. The Exchange has satisfied this are the only changes to the Penny Pilot Program
requirement. 2 17 CFR 240.19b–4. being proposed at this time.

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26176 Federal Register / Vol. 82, No. 107 / Tuesday, June 6, 2017 / Notices

that have been delisted on the second Pilot and a determination of how the Comments may be submitted by any of
trading day following July 1, 2017. The Pilot should be structured in the future; the following methods:
Exchange notes that the replacement and will serve to promote regulatory
Electronic Comments
classes will be selected based on trading clarity and consistency, thereby
activity for the six month period reducing burdens on the marketplace • Use the Commission’s Internet
beginning December 1, 2016 and ending and facilitating investor protection. The comment form (http://www.sec.gov/
May 31, 2017 for the July 2017 Pilot is an industry wide initiative rules/sro.shtml); or
replacements. The Exchange will supported by all other option
employ the same parameters to exchanges. The Exchange believes that • Send an email to rule-comments@
prospective replacement classes as extending the Pilot will allow for sec.gov. Please include File Number SR–
approved and applicable under the Pilot continued competition between market BOX–2017–18 on the subject line.
Program, including excluding high- participants on the Exchange trading Paper Comments
priced underlying securities. The similar products as their counterparts
Exchange will distribute a Regulatory on other exchanges, while at the same • Send paper comments in triplicate
Circular notifying Participants which time allowing the Exchange to continue to Secretary, Securities and Exchange
replacement classes shall be included in to compete for order flow with other Commission, 100 F Street NE.,
the Penny Pilot Program. exchanges in option issues trading as Washington, DC 20549–1090.
BOX is specifically authorized to act part of the Pilot. All submissions should refer to File
jointly with the other options exchanges
C. Self-Regulatory Organization’s Number SR–BOX–2017–18. This file
participating in the Pilot Program in
Statement on Comments on the number should be included on the
identifying any replacement class.
Proposed Rule Change Received From subject line if email is used. To help the
2. Statutory Basis Members, Participants, or Others Commission process and review your
The Exchange believes that the The Exchange has neither solicited comments more efficiently, please use
proposal is consistent with the nor received comments on the proposed only one method. The Commission will
requirements of Section 6(b) of the Act,4 rule change. post all comments on the Commission’s
in general, and Section 6(b)(5) of the Internet Web site (http://www.sec.gov/
Act,5 in particular, in that it is designed III. Date of Effectiveness of the rules/sro.shtml). Copies of the
to prevent fraudulent and manipulative Proposed Rule Change and Timing for submission, all subsequent
acts and practices, to promote just and Commission Action amendments, all written statements
equitable principles of trade, to foster (a) This proposed rule change is filed with respect to the proposed rule
cooperation and coordination with pursuant to paragraph (A) of section change that are filed with the
persons engaged in facilitating 19(b)(3) of the Exchange Act 6 and Rule Commission, and all written
transactions in securities, and to remove 19b–4(f)(6) thereunder.7 communications relating to the
impediments to and perfect the (b) This proposed rule change does proposed rule change between the
mechanism of a free and open market not significantly affect the protection of Commission and any person, other than
and a national market system, and, in investors or the public interest, does not those that may be withheld from the
general protect investors and the public impose any significant burden on public in accordance with the
interest. competition, and, by its terms, does not provisions of 5 U.S.C. 552, will be
In particular, the proposed rule become operative for 30 days after the available for Web site viewing and
change, which extends the Penny Pilot date of the filing, or such shorter time printing in the Commission’s Public
until December 31, 2017 and changes as the Commission may designate if Reference Room, on official business
the dates for replacing Penny Pilot consistent with the protection of days between the hours of 10:00 a.m.
issues that were delisted to the second investors and the public interest. and 3:00 p.m., located at 100 F Street
trading day following July 1, 2017, will At any time within 60 days of the NE., Washington, DC 20549. Copies of
enable public customers and other filing of the proposed rule change, the such filing also will be available for
market participants to express their true Commission summarily may inspection and copying at the principal
prices to buy and sell options for the temporarily suspend such rule change if office of the Exchange. All comments
benefit of all market participants. This it appears to the Commission that such received will be posted without change;
is consistent with the Act. action is necessary or appropriate in the the Commission does not edit personal
public interest, for the protection of identifying information from
B. Self-Regulatory Organization’s investors, or otherwise in furtherance of
Statement on Burden on Competition submissions. You should submit only
the purposes of the Act. If the information that you wish to make
The Exchange does not believe that Commission takes such action, the available publicly. All submissions
the proposed rule change will impose Commission shall institute proceedings should refer to File Number SR–BOX–
any burden on competition not to determine whether the proposed rule 2017–18 and should be submitted on or
necessary or appropriate in furtherance should be approved or disapproved. before June 27, 2017.
of the purposes of the Act. To the
IV. Solicitation of Comments For the Commission, by the Division of
contrary, this proposal is pro-
Interested persons are invited to Trading and Markets, pursuant to delegated
competitive because it allows Penny authority.8
Pilot issues to continue trading on the submit written data, views and
arguments concerning the foregoing, Eduardo A. Aleman,
Exchange. Moreover, the Exchange
mstockstill on DSK30JT082PROD with NOTICES

believes that the proposed rule change including whether the proposed rule Assistant Secretary.
will allow for further analysis of the change is consistent with the Act. [FR Doc. 2017–11612 Filed 6–5–17; 8:45 am]
BILLING CODE 8011–01–P
4 15 U.S.C. 78f(b). 6 15 U.S.C. 78s(b)(3)(A).
5 15 U.S.C. 78f(b)(5). 7 17 CFR 240.19b–4(f)(6). 8 17 CFR 200.30–3(a)(12).

VerDate Sep<11>2014 20:52 Jun 05, 2017 Jkt 241001 PO 00000 Frm 00135 Fmt 4703 Sfmt 9990 E:\FR\FM\06JNN1.SGM 06JNN1
Document Created: 2017-06-06 06:20:45
Document Modified: 2017-06-06 06:20:45
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		82 FR 26175